TITLE XVFOREIGN
CORPORATIONS
Sec. 123. Definition
and rights of foreign corporations. - For the purposes
of
this Code, a foreign corporation is one formed, organized or existing
under
any laws other than those of the Philippines and whose laws allow
Filipino
citizens and corporations to do business in its own country or state.
It
shall have the right to transact business in the Philippines after it
shall
have obtained a license to transact business in this country in
accordance
with this Code and a certificate of authority from the appropriate
government
agency. (n)
Sec. 124. Application
to existing foreign corporations. - Every foreign
corporation
which on the date of the effectivity of this Code is authorized to do
business
in the Philippines under a license therefore issued to it, shall
continue
to have such authority under the terms and condition of its license,
subject
to the provisions of this Code and other special laws. (n)
Sec. 125. Application
for a license.- A
foreign
corporation applying for a license to transact business in the
Philippines
shall submit to the Securities and Exchange Commission a copy of its
articles
of incorporation and by-laws, certified in accordance with law, and
their
translation to an official language of the Philippines, if necessary.
The
application shall be under oath and, unless already stated in its
articles
of incorporation, shall specifically set forth the following:
1. The date and term of incorporation;
2. The address, including the street
number,
of the principal office of the corporation in the country or state of
incorporation;
3. The name and address of its
resident agent
authorized to accept summons and process in all legal proceedings and,
pending the establishment of a local office, all notices affecting the
corporation;
4. The place in the Philippines where
the
corporation intends to operate;
5. The specific purpose or purposes
which
the corporation intends to pursue in the transaction of its business in
the Philippines: Provided, That said purpose or purposes are those
specifically
stated in the certificate of authority issued by the appropriate
government
agency;
6. The names and addresses of the
present
directors and officers of the corporation;
7. A statement of its authorized
capital stock
and the aggregate number of shares which the corporation has authority
to issue, itemized by classes, par value of shares, shares without par
value, and series, if any;
8. A statement of its outstanding
capital
stock and the aggregate number of shares which the corporation has
issued,
itemized by classes, par value of shares, shares without par value, and
series, if any;
9. A statement of the amount actually
paid
in; and
10. Such additional information as may
be
necessary or appropriate in order to enable the Securities and Exchange
Commission to determine whether such corporation is entitled to a
license
to transact business in the Philippines, and to determine and assess
the
fees payable.
Attached to
the application for license shall
be a duly executed certificate under oath by the authorized official or
officials of the jurisdiction of its incorporation, attesting to the
fact
that the laws of the country or state of the applicant allow Filipino
citizens
and corporations to do business therein, and that the applicant is an
existing
corporation in good standing. If such certificate is in a foreign
language,
a translation thereof in English under oath of the translator shall be
attached thereto.
The
application for a license to transact
business in the Philippines shall likewise be accompanied by a
statement
under oath of the president or any other person authorized by the
corporation,
showing to the satisfaction of the Securities and Exchange Commission
and
other governmental agency in the proper cases that the applicant is
solvent
and in sound financial condition, and setting forth the assets and
liabilities
of the corporation as of the date not exceeding one (1) year
immediately
prior to the filing of the application.
Foreign
banking, financial and insurance corporations
shall, in addition to the above requirements, comply with the
provisions
of existing laws applicable to them. In the case of all other foreign
corporations,
no application for license to transact business in the Philippines
shall
be accepted by the Securities and Exchange Commission without previous
authority from the appropriate government agency, whenever required by
law. (68a)
Sec. 126. Issuance
of a license.- If the
Securities and Exchange Commission is satisfied that the applicant has
complied with all the requirements of this Code and other special laws,
rules and regulations, the Commission shall issue a license to the
applicant
to transact business in the Philippines for the purpose or purposes
specified
in such license. Upon issuance of the license, such foreign corporation
may commence to transact business in the Philippines and continue to do
so for as long as it retains its authority to act as a corporation
under
the laws of the country or state of its incorporation, unless such
license
is sooner surrendered, revoked, suspended or annulled in accordance
with
this Code or other special laws.
Within sixty
(60) days after the issuance
of the license to transact business in the Philippines, the license,
except
foreign banking or insurance corporation, shall deposit with the
Securities
and Exchange Commission for the benefit of present and future creditors
of the licensee in the Philippines, securities satisfactory to the
Securities
and Exchange Commission, consisting of bonds or other evidence of
indebtedness
of the Government of the Philippines, its political subdivisions and
instrumentalities,
or of government-owned or controlled corporations and entities, shares
of stock in "registered enterprises" as this term is defined in
Republic
Act No. 5186, shares of stock in domestic corporations registered in
the
stock exchange, or shares of stock in domestic insurance companies and
banks, or any combination of these kinds of securities, with an actual
market value of at least one hundred thousand (P100,000.) pesos;
Provided,
however, That within six (6) months after each fiscal year of the
licensee,
the Securities and Exchange Commission shall require the licensee to
deposit
additional securities equivalent in actual market value to two (2%)
percent
of the amount by which the licensee's gross income for that fiscal year
exceeds five million (P5,000,000.00) pesos. The Securities and Exchange
Commission shall also require deposit of additional securities if the
actual
market value of the securities on deposit has decreased by at least ten
(10%) percent of their actual market value at the time they were
deposited.
The Securities and Exchange Commission may at its discretion release
part
of the additional securities deposited with it if the gross income of
the
licensee has decreased, or if the actual market value of the total
securities
on deposit has increased, by more than ten (10%) percent of the actual
market value of the securities at the time they were deposited. The
Securities
and Exchange Commission may, from time to time, allow the licensee to
substitute
other securities for those already on deposit as long as the licensee
is
solvent. Such licensee shall be entitled to collect the interest or
dividends
on the securities deposited. In the event the licensee ceases to do
business
in the Philippines, the securities deposited as aforesaid shall be
returned,
upon the licensee's application therefor and upon proof to the
satisfaction
of the Securities and Exchange Commission that the licensee has no
liability
to Philippine residents, including the Government of the Republic of
the
Philippines. (n)
Sec. 127. Who
may be a resident agent. - A resident agent may be
either
an individual residing in the Philippines or a domestic corporation
lawfully
transacting business in the Philippines: Provided, That in the case of
an individual, he must be of good moral character and of sound
financial
standing. (n)
Sec. 128. Resident
agent; service of process. - The Securities and Exchange
Commission shall require as a condition precedent to the issuance of
the
license to transact business in the Philippines by any foreign
corporation
that such corporation file with the Securities and Exchange Commission
a written power of attorney designating some person who must be a
resident
of the Philippines, on whom any summons and other legal processes may
be
served in all actions or other legal proceedings against such
corporation,
and consenting that service upon such resident agent shall be admitted
and held as valid as if served upon the duly authorized officers of the
foreign corporation at its home office. Any such foreign corporation
shall
likewise execute and file with the Securities and Exchange Commission
an
agreement or stipulation, executed by the proper authorities of said
corporation,
in form and substance as follows:
"The (name of
foreign corporation) does hereby
stipulate and agree, in consideration of its being granted by the
Securities
and Exchange Commission a license to transact business in the
Philippines,
that if at any time said corporation shall cease to transact business
in
the Philippines, or shall be without any resident agent in the
Philippines
on whom any summons or other legal processes may be served, then in any
action or proceeding arising out of any business or transaction which
occurred
in the Philippines, service of any summons or other legal process may
be
made upon the Securities and Exchange Commission and that such service
shall have the same force and effect as if made upon the
duly-authorized
officers of the corporation at its home office."
Whenever such
service of summons or other
process shall be made upon the Securities and Exchange Commission, the
Commission shall, within ten (10) days thereafter, transmit by mail a
copy
of such summons or other legal process to the corporation at its home
or
principal office. The sending of such copy by the Commission shall be
necessary
part of and shall complete such service. All expenses incurred by the
Commission
for such service shall be paid in advance by the party at whose
instance
the service is made.
In case of a
change of address of the resident
agent, it shall be his or its duty to immediately notify in writing the
Securities and Exchange Commission of the new address. (72a; and n)
Sec. 129. Law
applicable. - Any foreign corporation lawfully doing
business
in the Philippines shall be bound by all laws, rules and regulations
applicable
to domestic corporations of the same class, except such only as provide
for the creation, formation, organization or dissolution of
corporations
or those which fix the relations, liabilities, responsibilities, or
duties
of stockholders, members, or officers of corporations to each other or
to the corporation. (73a)
Sec. 130. Amendments
to articles of incorporation or by-laws of foreign corporations.
- Whenever the articles of incorporation or by-laws of a foreign
corporation
authorized to transact business in the Philippines are amended, such
foreign
corporation shall, within sixty (60) days after the amendment becomes
effective,
file with the Securities and Exchange Commission, and in the proper
cases
with the appropriate government agency, a duly authenticated copy of
the
articles of incorporation or by-laws, as amended, indicating clearly in
capital letters or by underscoring the change or changes made, duly
certified
by the authorized official or officials of the country or state of
incorporation.
The filing thereof shall not of itself enlarge or alter the purpose or
purposes for which such corporation is authorized to transact business
in the Philippines. (n)
Sec. 131. Amended
license. - A foreign corporation authorized to transact
business in the Philippines shall obtain an amended license in the
event
it changes its corporate name, or desires to pursue in the Philippines
other or additional purposes, by submitting an application therefor to
the Securities and Exchange Commission, favorably endorsed by the
appropriate
government agency in the proper cases. (n)
Sec. 132. Merger
or consolidation involving a foreign corporation licensed in the
Philippines.
- One or more foreign corporations authorized to transact business in
the
Philippines may merge or consolidate with any domestic corporation or
corporations
if such is permitted under Philippine laws and by the law of its
incorporation:
Provided, That the requirements on merger or consolidation as provided
in this Code are followed.
Whenever a
foreign corporation authorized
to transact business in the Philippines shall be a party to a merger or
consolidation in its home country or state as permitted by the law of
its
incorporation, such foreign corporation shall, within sixty (60) days
after
such merger or consolidation becomes effective, file with the
Securities
and Exchange Commission, and in proper cases with the appropriate
government
agency, a copy of the articles of merger or consolidation duly
authenticated
by the proper official or officials of the country or state under the
laws
of which merger or consolidation was effected: Provided, however, That
if the absorbed corporation is the foreign corporation doing business
in
the Philippines, the latter shall at the same time file a petition for
withdrawal of it license in accordance with this Title. (n)
Sec. 133. Doing
business without a license. - No foreign corporation
transacting
business in the Philippines without a license, or its successors or
assigns,
shall be permitted to maintain or intervene in any action, suit or
proceeding
in any court or administrative agency of the Philippines; but such
corporation
may be sued or proceeded against before Philippine courts or
administrative
tribunals on any valid cause of action recognized under Philippine
laws.
(69a)
Sec. 134. Revocation
of license. - Without prejudice to other grounds
provided
by special laws, the license of a foreign corporation to transact
business
in the Philippines may be revoked or suspended by the Securities and
Exchange
Commission upon any of the following grounds:
1. Failure to file its annual report or
pay
any fees as required by this Code;
2. Failure to appoint and maintain a
resident
agent in the Philippines as required by this Title;
3. Failure, after change of its
resident agent
or of his address, to submit to the Securities and Exchange Commission
a statement of such change as required by this Title;
4. Failure to submit to the Securities
and
Exchange Commission an authenticated copy of any amendment to its
articles
of incorporation or by-laws or of any articles of merger or
consolidation
within the time prescribed by this Title;
5. A misrepresentation of any material
matter
in any application, report, affidavit or other document submitted by
such
corporation pursuant to this Title;
6. Failure to pay any and all taxes,
imposts,
assessments or penalties, if any, lawfully due to the Philippine
Government
or any of its agencies or political subdivisions;
7. Transacting business in the
Philippines
outside of the purpose or purposes for which such corporation is
authorized
under its license;
8. Transacting business in the
Philippines
as agent of or acting for and in behalf of any foreign corporation or
entity
not duly licensed to do business in the Philippines; or
9. Any other ground as would render it
unfit
to transact business in the Philippines. (n)
Sec. 135. Issuance
of certificate of revocation. - Upon the revocation of
any
such license to transact business in the Philippines, the Securities
and
Exchange Commission shall issue a corresponding certificate of
revocation,
furnishing a copy thereof to the appropriate government agency in the
proper
cases.
The
Securities and Exchange Commission shall
also mail to the corporation at its registered office in the
Philippines
a notice of such revocation accompanied by a copy of the certificate of
revocation. (n)
Sec. 136. Withdrawal
of foreign corporations.-
Subject to existing laws and regulations, a foreign corporation
licensed
to transact business in the Philippines may be allowed to withdraw from
the Philippines by filing a petition for withdrawal of license. No
certificate
of withdrawal shall be issued by the Securities and Exchange Commission
unless all the following requirements are met;
1. All claims which have accrued in the
Philippines
have been paid, compromised or settled;
2. All taxes, imposts, assessments,
and penalties,
if any, lawfully due to the Philippine Government or any of its
agencies
or political subdivisions have been paid; and
3. The petition for withdrawal of
license
has been published once a week for three (3) consecutive weeks in a
newspaper
of general circulation in the Philippines. |