Voluntary Dissolution of Corporations
-
Upload
john-mark-paracad -
Category
Documents
-
view
229 -
download
0
Transcript of Voluntary Dissolution of Corporations
-
8/3/2019 Voluntary Dissolution of Corporations
1/20
-
8/3/2019 Voluntary Dissolution of Corporations
2/20
PROCEEDINGS
Presidential Decree 902-A and Corporation Code(BP 68)
Jurisdiction: Regional Trial
Court
R.A No. 8799 since July 19,
2000
Presidential Decree 902-A and Corporation Code(BP 68)
Jurisdiction:Securities and Exchange
Commission(SEC)
RULE 104
Jurisdiction:Court of First
Instance(Regional Trial Court)
-
8/3/2019 Voluntary Dissolution of Corporations
3/20
Appeal
Decisions of the courts in the foregoing
cases are appealable to the Court of
Appeals, as provided by Section 70 of
Rep. Act No. 8799, which is an
affirmation of Rule 43, 1997 Rules of
Civil Procedure.
-
8/3/2019 Voluntary Dissolution of Corporations
4/20
Dissolution of a corporation
signifies the extinguishment ofits franchise and the termination
of its corporate existence.
A corporation formed ororganized under the provisions
of the Corporation Code of the
Philippines may be dissolvedvoluntarily or involuntarily.
-
8/3/2019 Voluntary Dissolution of Corporations
5/20
3 Modes of VoluntaryDissolution
1. Where no creditors are affectedbythe dissolution bythedissolution, byan administrative
application for dissolution filed withthe Securities and ExchangeCommission (SEC);
2. Wherecreditors are affected
bydissolution filed with the SEC, withdue notice and hearing to be dulyconducted; and
-
8/3/2019 Voluntary Dissolution of Corporations
6/20
3. Shortening of a
corporate term by theamendment of the
articles of incorporation.
-
8/3/2019 Voluntary Dissolution of Corporations
7/20
A. Voluntary dissolution where no
creditors are affected When no creditors are involved, only a SEC
application for dissolution is required. The
process is equivalent to the application for the
amendment of the articles of incorporation,except that in addition, publication of the notice
of dissolution must also be complied with.
Under Section 118 of the Corporation Code, in
case the dissolution of a corporation does notprejudice the rights of any creditor having a
claim against such a corporation, the dissolution
may be affected by complying with the following
procedural requirements:
-
8/3/2019 Voluntary Dissolution of Corporations
8/20
1. Majority vote of the board of directors or
trustees adopting a resolution for the
dissolution of the corporation;
2. Sending notices to each stockholder or
member either by registered mail or bypersonal delivery, of the time, place and
object of the meeting calling for the
approval of the dissolution of thecorporation, at least thirty (30) days prior
to said meeting;
-
8/3/2019 Voluntary Dissolution of Corporations
9/20
3. Publication of such notice of meeting for
three (3) consecutive weeks in a
newspaper published in the place where
the principal office of said corporation is
located; and if none, in a newspaper of
general circulation in the Philippines; and4. The resolution duly adopted by the
affirmative vote of the stockholders
owning at least two-thirds (2/3) of theoutstanding capital stock, or of at least
two-thirds (2/3) of the members, at a
meeting held on the call of the directors or
trustees.
-
8/3/2019 Voluntary Dissolution of Corporations
10/20
A copy of the resolution authorizing thedissolution shall be certified by a majorityof the board of directors or trustees andcountersigned by the secretary of thecorporation and filed with the SEC. TheSEC shall thereupon issue the certificate of
dissolution. The SEC will not deny an application for
dissolution when there are no creditorsinvolved because of the constitutional
prohibition against involuntary servitude orthe constitutional guarantee of association,and the right to refuse to continue anassociation.
-
8/3/2019 Voluntary Dissolution of Corporations
11/20
B. Voluntary dissolution where
creditors are affected If there are no creditors involved, there is a need to file
a formal petition for dissolution with the SEC. Theproceedings are quasi-judicial in nature andconducted to ensure that the rights of the creditors are
fully protected. In such proceedings, the SEC is notmandated to dissolve a corporation, especially when itwould be detrimental to the interests of the creditors,who may wish to rehabilitate the operations of thecorporation to ensure that it would be able to pay-off
all of its debt.
Under Section 119 of the Corporation Code, where thedissolution may prejudice the rights of any creditor, thefollowing procedure shall be complied with:
-
8/3/2019 Voluntary Dissolution of Corporations
12/20
1. A petition for dissolution shall be filed withthe SEC, signed by a majority of its board
of directors or trustees or other officershaving the management of its affairs,verified by its president or secretary or oneof its directors or trustees, and shall setforth all claims and demands against it, andthat its dissolution was resolved upon bythe affirmative vote of the stockholdersrepresenting at least two-thirds (2/3) of theoutstanding capital stock or by at least two-
thirds (2/3) of the members at a meeting ofits stockholders or members called for thatpurpose.
-
8/3/2019 Voluntary Dissolution of Corporations
13/20
2. If the petition is sufficient in form
and substance, the SEC, by anorder reciting the purpose of the
petition, shall fix a date on or
before which objections theretomay be filed by any person,
which date shall not be less than
thirty (30) days nor more thansixty (60) days after the entry of
the order.
-
8/3/2019 Voluntary Dissolution of Corporations
14/20
3. Before such date, a copy of the order
shall be published at least once a week
for three (3) consecutive weeks in a
newspaper of general circulation
published in the municipality or city
where the principal office of thecorporation is situated, or if there be no
such newspaper, then in a newspaper of
general circulation in the Philippines,
and a similar copy shall be posted forthree (3) consecutive weeks in three (3)
public places in such municipality or city.
-
8/3/2019 Voluntary Dissolution of Corporations
15/20
4. Upon five (5) days notice, given afterthe date on which the right to file
objections as fixed in the order hasexpired, the Commission shall proceedto hear the petition and try any issuemade by the objections filed; and if no
such objection is sufficient, and thematerial allegations of the petition aretrue, it shall render judgment dissolvingthe corporation and directing such
disposition of its assets as justicerequires, and may appoint a receiver tocollect such assets and pay the debts ofthe corporation.
-
8/3/2019 Voluntary Dissolution of Corporations
16/20
C. Dissolution by shortening
corporate termA voluntary dissolution may be effected by
amending the articles of incorporation to shorten
the corporate term. A copy of the amended articles
of incorporation shall be submitted to the SEC inaccordance with the Corporation Code. Upon
approval of the amended articles of incorporation
of the expiration of the shortened term, as the
case may be, the corporation shall be deemeddissolved without any further proceedings, subject
to the provisions for corporate liquidation.
The following requirements must be submitted to
the SEC:
-
8/3/2019 Voluntary Dissolution of Corporations
17/20
1. Notice of the dissolution of
the corporation by shorteningits corporate term be
published in a newspaper of
general circulation for three(3) consecutive weeks;
2. List of corporate creditors,with their consent to the
shortening of corporate term;
-
8/3/2019 Voluntary Dissolution of Corporations
18/20
3. Submission by the majority stockholders
or principal officers of the corporation of
an undertaking under oath that theyshall be personally answer for any
outstanding obligations of the
corporation; and4. Latest audited financial statements of
the corporation which must not be
earlier than the date of the stockholders
or membership meeting approving theamendment to the articles of
incorporation;
-
8/3/2019 Voluntary Dissolution of Corporations
19/20
5. BIR Tax Clearance
6. Directors' Certificate - A Notarized
document signed by majority of the
directors and corporate secretary
certifying the amendment of the articles
of incorporation shortening the corporateterm, the votes of the directors and
stockholders thereto, and the date and
place of the stockholders meeting
7. Indorsments/clearances from other
government agencies, if applicable.
-
8/3/2019 Voluntary Dissolution of Corporations
20/20
Dissolution by expiration of
corporate term This is another mode of voluntary
dissolution, when the corporate life of
the corporation as stated in its articles ofincorporation is allowed to expire,
without extension, then the corporation
is deemed dissolved by such expiration
without the need of further action on thepart of the corporation or the State.
(Section 11).