Republic of the Philippines

Department of Finance

Securities and Exchange Commission

SEC Building, EOSA, Greenhills, Mandaluyong Cily Oflice of the General Counsel

ZO September ZOl1 SEC-OGC Opinion No. 11-38 Revoked corporations

MA. LOURDES F. REBUENO General Manager National Development Company NDC Building, 116 Tordesillas st. Salcedo Village, Makati City

Madam: This refers to your letter dated 07 June Z0111 and received by this Office on 16 July ZOl1, regarding the status of Crowntex Realty Corporation CCrowntex''),2 a wholly owned subsidiary of the National Development Company CNDC''). In your letter, you attached a Certificate of Corporate' Filing and Information secured from the Corporate Filing and Records Division CCFRD'') of the Company Registration and Monitoring Department CCRMD"), where it is stated that the certificate of Registration of Crowntex was revoked on Z9 September 2003 for non-compliance with reportorial requirements. Thus, you are seeking legal Opl11l0n on whether or not the Order of Revocation issued by the Commission on Z9 September Z003 is tantamount to the dissolution of Crowntex and what appropriate steps the corporation may take, if any. In the case of Crowntex, its registration was revoked by virtue of SEC Order of Revocation dated ZO August Z003, pursuant to its authority to "suspend, or revoke, after proper notice and hearing the franchise or certificate of registration of corporations, partnerships or associations, upon any of the grounds provided by law."3 In SEC Circular No.4, series of Z008 CMC No.4, s. Z008''), the Commission provided a schedule for corporations revoked via mass revocation within which to file petitions to lift the orders of revocation issued against them. In the case of Crowntex, it had until Z9 September Z009 within which to file its petition.
The letter dated 07 June 2011 was endorsed to this Office by the CRMD on 14 June 201l.

1 2

SEC Reg. No. 124587.

Sec. 6(1), Presidential De(:ree No, 902-A, as amended.

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In SEC Circular No. 15, series of 2009 ("MC No. 15, s. 2009"), the deadline within which corporations could file a petition to lift order of revocation was extended to one (1) more year - in the case of Crowntex, until 29 September 2010. SEC Resolution No. 598, Series of 2010 ("SEC Res. No. 598, S. 2010,,)4 now allows the revoked corporations to file petitions to lift order of revocation even after the lapse of the 1-year period provided under MC No. 15, s. 2009. , Considering the foregoing, Crowntex may still file its Petition to lift the Order of Revocation ("Petition") before the Law and Regulation Division of the CRMD ("LRD-CRMD"). Together with the Petition, the corporation has to file a Directors'fTrustees Certificate signed by a majority of the board of directors, its latest General Information Sheet and Audited Financial Statements, a photocopy of Membership/Stock and Transfer Book, proof of operation, and a copy of Certificate of Registration or iatest Certificate of Amendment if there is a change in corporate name. For further information, you can consult the LRD-CRMD. The foregoing opinion rendered is based solely on the facts disclosed in the query and relevant solely to the particular issues raised therein and shall not be used in the nature of a standing rule binding upon the Commission whether of similar or dissimilar circumstances.s If, upon investigation, it will be disclosed that the facts relied upon are different, this opinion shall be rendered void. Pleasebe guided accordingly.

Very truly yours,

~ '(--

VESPER JU~~B" GARCIA Offi;/rjn-tharge

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Adopted by the Commission on December 16, 2010. SEC Memorandum Circular No. 15, series of 2003.

Republic of the Philippines SECURITIES AND EXCHANGECOMMISSION SEC Bldg. EDSA, Greenhills, Mandaluyong City OFFICE OF THE GENERAL COUNSEL

16 June 2011 SEC-OGC Opinion No. 11-30 Dissolution & Liquidation

Sylvia B. Trinidad 21 Mars Street, Bel-Air 1 Makati City

Madam: This refers to your 06 April 2011 letter requesting opinion on the procedures for dissolution of Cebu Memorial Park, Inc (Cempark). You allege that: (1) you are a stockholder and director of the subject corporation that is engaged in the selling of lots in a park for interment purposes; (2) as seller, the corporation agreed that the park is to be operated as a perpetual care cemetery, and that the deposit by the purchaser shall be placed in trust for the maintenance of the park; (3) that the net income of the existing trust fund adequately covers the annual maintenance of the park; and (3) now, it is your intention to dissolve the corporation and turn over the management of the park to the lot owners. Thus, you ask for the Commission's opinion on whether possible: 1. For the corporation to start distributing liquidating dividends. 2. For the corporation to dissolve and turn over management of the park to lot owners. 3. for the lot owners to elect a board of directors that will manage the park. You seek the Commission's advice on how you should proceed with these matters. the following is

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We advise as follows:

1. Liquidating dividends are dividends which are actually distributions of assets of the corporation upon dissolution 1 They are not paid on account 2 of earnings or profits, but as a return of capital invested. Under Section 122 of the Corporation Code,3 "no corporation shall distribute any of its assets or property except upon lawful dissolution and after payment of all its debts and liabilities." In other words, the corporation can only distribute liquidating after it is dissolved, and all of its creditors have been paid. dividends

2. A corporation may be dissolved voluntarily by majority vote of the board of directors or trustees, and by a resolution duly adopted by the affirmative vote of the stockholders owning at least two-thirds (2/3) of the outstanding capital stock or of at least two-thirds (2/3) of the members of a meeting to be held upon call of the directors or trustees. Pursuant to Sections 117 to 120 of the Corporation Code, the Commission will issue the certificate of dissolution upon an application complying with the following requirements: a. Directors' Certificate - a notarized document signed by a majority of the directors/trustees and the corporate secretary, certifying: (1) the amendment of the Articles of Incorporation shortening the corporate term or the resolution adopting the dissolution, as the case may be; (2) the votes of the directors/trustees and stockholders/members; and (3) the date and place of the stockholders'/members' meeting; b. Amended Articles of Incorporation shortening of corporate term); (in case where dissolution is by

c. Audited financial statements as of date of the stockholders' meeting approving the dissolution or any date thereafter but not earlier than 60 days prior to the date of filing of the application; d. List of creditors, if any, and the consent of the creditors, certification as to non- existence of creditors; e. Certificate Revenue; or

of No Tax Liability issued by the Bureau of Internal

SEC Opinion No. 70 -03! 16 December 2003/, citing Wise & CO. SEC Op'nion No. 70 -03. Batas Pambansa Bilang 68 (01 May 1980).

VS.

Meer. G.R. NO.4 823 1,June 30,

1947.
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f.

Publisher's affidavit of the publication of the notice of dissolution of the corporation (once a week for three [3J consecutive weeks);

g. Endorsement/clearance from other government agencies, if the corporation engages in an activity regulated by such agencies; However, if consent of the creditors was not obtained, then aside from the foregoing requirements, the application should be in the form of a petition. The petition shall be filed with the Commission, and judgment shall be rendered after due notice and hearing in accordance with Section 119 of the Corporation Code. After dissolution, the corporation can continue as a body corporate for three (3) more years for the purpose of winding up its affairs, enabling it to dispose its property, and distribute its assets.
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From the facts that you have represented, we understand that Cempark, as seller, is obligated to perpetually manage the park for the benefit of the lot owners. This outstanding obligation means that every lot owner is a creditor of Cempark. Hence, you need to obtain the consent of each and every

lot owner in order to dissolve Cempark.

Further, you must also secure the consent of each and every lot

owner to your proposal for them to organize a new corporation and take over the management of the park from Cempark after the latter is dissolved.

3. Any number of natural persons not less than five (5) but not more than fifteen (15), all of legal age and a majority of whom are residents of the Philippines, may form a private corporation for any lawful purpose or purposes.s We opine that the management of a memorial park is a lawful purpose. Thus, if the lot owners agree with you and among themselves, then they may choose to incorporate a stock corporation and elect a board of directors to pursue such purpose.

It must be emphasized that the Commission expresses no opinion on the interpretation of contracts, or the contractual rights of parties involved. Any questions, or disputes relating thereto must be submitted to the
courts that have exclusive jurisdiction on the matter.
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Corporation Code, Sections J 22. Corporation Code, Sections 10. , SEC MemorandumCircularNo. 15.
5

series of 2003

(16

December2003).
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This opinion is rendered based solely on the facts and circumstances disclosed and relevant solely to the particular issues raised therein and shall not be used in the nature of a standing rule binding upon the Commission in other cases whether of similar or dissimilar circumstances. If, upon investigation, it will be disclosed that the facts relied upon are different, this opinion shall be rendered null and void. Please be guided accordingly.

vesper~:-~arCia offi~~~Fcharge

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