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SEC issues regulations in reviving expired firms

The Security and Exchange Commission (SEC) has started accepting applications for the revival of expired corporations.

According to SEC, Republic Act No. 11232 or the Revised Corporation Code of the Philippines, provides for the perpetual existence of corporations, SEC will be catering applications for expired firms. Under the old Code, firm terms were capped at 50 years.

This after SEC finalized the guidelines on the Revival of Expired Corporations issued through SEC Memorandum Circular No. 23, Series of 2019, which became effective upon its publication on December 6.

Under the guidelines, an expired corporation whose certificate of registration has been suspended or revoked for non-filing of reports may revive its existence, provided it shall file the proper petition and settle the corresponding penalties.

The guidelines also cited that expired corporation whose corporate name has already been validly reused by another existing corporation may likewise apply for a revival of corporate existence, provided it shall change its corporate name, however expired corporation may also not apply for revival of corporate existence when it has already availed of re-registration, except when the re-registered corporation has undertaken to undergo voluntary dissolution or change its corporate name.

SEC also said that at least a majority of the board of directors or trustees and of the outstanding capital stock or members, in the case of a non-stock corporation, must vote in favor of the revival of the expired corporation.

A revived corporation shall have two years from the issuance of its certificate of revival to comply with the provisions of the Revised Corporation Code.

The revival, which shall state that there is no intra-corporate controversy and that no third persons nor government agency will be prejudiced by its revival, among others.

“If there has been a change in the composition of the stockholders or members, the petition must include a reconciliation of the changes from the corporation’s expiration to the stockholders’ or members’ approval of the revival,” the SEC said.

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