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CORPORATIONS
DIZON, JEHANN
ROMERO, EDLYN
SECTIONS 123 TO
136, CCP
DEFINITION
A corporation formed, organized, or existing under
any law other than those of the of the Philippines,
and whose laws allow Filipino citizens and
corporations to do business in its own country or
state. (Sec. 123 CCP)
FOREIGN INVESTMENT
ACT OF 1991 (RA 7042)
Incorporation Test
the nationality of the Corporation is that of the state of
the incorporation regardless of the nationality of its
stockholders.
Control Test
the nationality of the corporation depends on the
nationality of the controlling stockholders.
GRANDFATHER RULE
Used to determine the nationality of the corporation
vis--vis compliance with the provisions of the
Constitution
and
other
laws
on
nationality
requirements.
The combined totals in the investing corporation and
the investee corporation must be traced to determine
the total percentage of Filipino ownership.
P.
CO.
FOREIGN
CORPORATIONS
By incorporating a Philippine
company
RESIDENT AGENT
An individual or a domestic corporation on whom any summons and other
legal processes may be served in all actions or other legal proceedings
against such corporation.
In case the resident agent is an individual, he must be of good moral
character and of sound financial standing.
CONDITIONS SUBSEQUENT TO
ISSUANCE OF LICENSE
1. The foreign corporation shall transact only for the purpose or purposes
for which it is authorized under its license
2. Within 60 days from issuance of licensee, the licensee shall deposit with
the SEC satisfactory securities in the actual market value of at least Php
1000,000 for the benefit of present and future creditors In the
Philippines and to compel foreign firms to invest and buy PH Securities
3. Within 6 months after each fiscal year of the license, it will deposit
additional securities (2% of the amount by which the licensees gross
income for that fiscal year exceeds 5 Million and such deposit shall be
increased if actual market value of the securities has decreased by
10%).
4. It must comply with existing laws, provisions, regulations. Otherwise,
RIGHT TO SUE
Whether a foreign corporation is possessed of the right to sue in
the Philippines is determined as follows:
1. If the foreign corporation is transacting or doing business in the
Philippines with a license, it has the right to sue within the
jurisdiction of the Philippines;
2. If it is transacting or doing business without a license, it cannot
sue;
3. If it is not transacting or doing business in the Philippines, it can
sue even if it is not possessed of any license.
RIGHT TO BE SUED
A foreign corporation may be sued in the Philippines:
1. If it is transacting or doing business in the
Philippines with a license;
2. If it is transacting or doing business in the
Philippines without a license.
However, if it is not transacting or doing business in the
Philippines and does not have any license to so transact
or do business in the Philippines, it cannot be sued in the
Philippines for lack of jurisdiction.
MULTINATIONAL COMPANY
REGIONAL OR AREA
HEADQUARTERS (RHQS)
an office whose purpose is to act as an administrative
branch of a multinational company engaged
in
international trade with principally serves as supervisory,
communications and coordination center for its
subsidiaries, branches or affiliates in the Asia-Pacific
Region and other foreign markets and which does NOT
earn or derive income in the Philippines.
MINIMUM REQUIREMENTS
Certifications from the Cosulate or Embassy or a duly authenticated certification of the
Department of Trade or its foreign equivalent that the entity is engaged in international
trade with affiliates, subsidiaries or branch offices in the Asia-Pacific Region and other
foreign markets
Duly authenticated certification from the principal officer of the foreign entity stating
that the foreign entity has been authorized by its Board of Directors or governing body
to establish its regional or area headquarters in thePhilippines, specifying:
Activities of the regional or area headquarters that shall be limited to supervisory, communications
and coordination center for its subsidiaries, etc.
That it will not derive any income from the Philippines nor participate in any management of any
subsidiary or branch, nor solicit or market goods and services on behalf of its mother company or
subsidiaries, etc.
It shall notify the Board of Investments and SEC of any decision to close down or suspend operations
at least 15 days before it is effected
MINIMUM REQUIREMENTS
Certifications from the Cosulate or Embassy or a duly authenticated certification of the
Department of Trade or its foreign equivalent that the entity is engaged in international trade
with affiliates, subsidiaries or branch offices in the Asia-Pacific Region and other foreign markets
Duly authenticated certification from the principal officer of the foreign entity stating that the
foreign entity has been authorized by its Board of Directors or governing body to establish its
regional or area operating headquarters in the Philippines, specifying:
The ROHQ may engage in the following qualifying services:
REVOCATION OF LICENSE
Effects of revocation:
Cannot affect the validity of contracts entered into
before the revocation nor its right to maintain an action.
After revocation, FC can seek redress from the courts to
enforce contracts; contracts entered into after
revocation still valid.
Pursuant to Section 133, FC can no longer transact
business in the Philippines.
WITHDRAWAL OF A FOREIGN
CORPORATION
1. A petition for withdrawal of license must be filed with the SEC
which shall issue a certificate of withdrawal only after compliance
with the requirements mentioned in Section 136.
2. To ascertain the foreign corporation has no outstanding liabilities
to residents in the Philippines, the Commission shall have to make
an examination and inspection of its books and records.
3. The courts may review the action of the Commission approving
the withdrawal of a foreign corporations.