Appraisal Rights under Sec.

81
Any stockholder shall have the right to dissent and
demand payment of the fair value of his shares
Instances:
1.
Any amendment to the AOI:
a.
which has the effect of changing or
restricting the rights of any
stockholders or class of shares
b.
authorizing preferences in any respect
superior to those or outstanding
shares of any class
c.
extending or shortening the term of
corporate existence
2.
Sale, lease, exchange, transfer, mortgage,
pledge or other disposition of all or substantially
all of the corporate property
3.
Merger or consolidation
Sec. 82 How is the right exercised?
Dissolution the extinguishment of the franchise of a corporation and the
termination of its corporate existence
Liquidation the winding up of the affairs of the corporation by getting in
the assets, settling with the creditors and debtors, and apportioning the
amount of profits and loss
* A case can continue until it is decided by the court. Where the case for
collection was filed before the dissolution of the corporation, it may
continue even after the 3-year period for winding up done by its corporate
board and said period is necessarily prolonged until final determination of
the litigation otherwise, corporations in liquidation would lose what justly
belongs to them or be exempt from payment through a mere technicality.
Besides, a lawyer who handled the case may be considered as a trustee
for the dissolved corporation, and as such trustee can continue with the
prosecution of the case until final determination thereof
Procedure for Voluntary Dissolution
a.
Where no creditors are affected:
1.
Affirmative vote of majority of Board
2.
Call for meeting of SH or M and publication of
notice
3.
Affirmative vote of 2/3 of the OCS or M
4.
Certified copy or resolution signed
5.
Filled in SEC
b.
Where creditors are affected:
1.
Affirmative vote of majority of Board
2.
Resolution of 2/3 OCS or M
3.
A verified petition filed with the SEC for the
dissolution
4.
Publication of order for purpose of dissolution
5.
SEC hears the petition and tries any issue made
by the objections filed

6.

c.

If no objection is sufficient, and the material

allegations of the petition are true, the
Commission shall render judgment dissolving
the corp
By shortening corporate term
1.
Amendment of AOI
2.
Approval of SEC

Foreign Corporation a corporation formed, organized, or existing under

any law other than those of the Philippines and whose laws allow Filipinos
and Corporations to do business in its own country or state
Rules regarding the right or a foreign corporation to bring suit in Philippine
Courts:
a.
If a foreign corporation does business in the P w/o a
license, it cannot sue before the P courts
b.
If a foreign corporation is not doing business in the P, it
needs no license to sue before P courts on an isolated
transaction or on a cause of action entirely independent of
any business transaction
c.
If a foreign corporation does business in the P w/o license,
a P citizen or entity which has contracted with said
Corporation may be estopped from challenging the foreign
corporations corporate personality in a suit brought before
P courts
d.
If a foreign corporation does business in the P with the
required license, it can sue before the P courts on any
transaction
Engaging in Business
1.
2.

2 Tests:
Substance Test whether the F C is continuing the body of the
business or enterprise for w/c it is organized or substantially
retired from it and turned over to another
Continuity Test implies a continuity or commercial dealings
and arrangements and contemplates performance of acts or
exercise functions incident to and for the purpose of
organization

Doing business in the Philippines if it indulges in a continuity of

commercial dealings and arrangements normally incident to and in the
prosecution of its purpose and object of its organization. Instances:
1.
soliciting orders, purchases or service contracts
2.
opening offices
3.
appointing representatives or distributors who are
domiciled in the P or who stays for a period or more than
180 days
4.
participating in the management, supervision or control of
any domestic business firm
5.
any other acts that may imply commercial dealings
How to Apply for License

1.
2.

3.
4.

Certified copy of its AOI and By-laws

Verified Certificate by an authorized official in the country
where the corporation is incorporated that Filipino citizens
and corps can do business therein and the applicant corpo
is a corpo in GOOD STANDING
Verified statement by an officer by the foreign corpo any
authorized rep that it is SOLVENT and IN SOUND FINANCIAL
CONDITION, setting forth its assets and liabities
Authority from the appropriate Philippine government
agency

Isolated Transaction a transaction or series of transactions set apart

from the common business of a foreign enterprise in the sense that there
is no intention to engage in a progressive pursuit of the purpose and
object of the business organization; a single act that is merely incidental
or casual
Laws and Rules Governing Foreign Corporations Doing business in the P
They are bound by all the rules, regulations applicable to
domestic corporations of the same class except for the creation,
formation, organization, or dissolution of corporations, or such as fix the
relations, liabilities and responsibilities or duties of members, sh, officers
to each other or to the corp.
Corporation Sole a special form of corporation usually associated with
the clergy and consists of one person only and his successors, who are
incorporated by law to give them some legal capacities and advantages.
Who may organize a Corpo Sole?
For the purpose of administering and managing as trustee the
affairs, properties, and temporalities of any religious denomination, sect
or church
It may be formed by: the chief archbishop, bishop, priest,
minister, rabbi, or other presiding elder of such religious denomination,
sect, or church
Procedure:

Close Corporation is one whose articles provide:

a.
that its shares shall not be held by a group of more than
20 persons
b.
that all of the issued stocks shall be subject to 1 or more
restrictions on transfer

c.

that the corporation shall not list in any stock exchange or

make public offering of any of its stocks