Published 29 March 2019, The Daily Tribune
This is the concluding article on the salient features of the Revised Corporation Code.
F.
Foreign Corporation
1. Issuance of a License
• A foreign corporation, except if it is a foreign banking or insurance corporation, is required to deposit shares of stock, debt securities or any financial instrument determined suitable by the SEC (Securities and Exchange Commission) within 60 days after the issuance of the license to transact business in the Philippines.
• The actual market value of the deposit requirement was increased from P100,000 to P500,000.
• The threshold gross income which will require the foreign corporation to deposit additional securities was also increased from P5 million to P10 million.
2.
Resident Agent
• If the resident agent is a domestic corporation, it must be of sound
financial standing and must provide a certification from the SEC that it is in
good standing.
G. Powers of the SEC
1.
Investigation and Prosecution of Offenses
• Power of the SEC to investigate and publish its findings regarding an alleged
violation but subject to Data Privacy Act and coordination with the appropriate
regulatory agency prior to publication
2. Cease
and Desist Orders
• SEC is granted with the power to issue cease and desist orders ex parte which
shall be valid for a maximum period of 20 days.
• Said
order may also become permanent after due notice and hearing.
• SEC may adjudge a person in contempt.
3. Administrative
Sanctions include
• Imposition of fine
• Permanent cease-and-desist order
• Suspension or revocation of certificate of incorporation
• Dissolution and forfeiture of the corporation’s assets.
4.
Liability of Directors, Trustees, Officers or Other Employees
• At the discretion of the court, the penalty may be imposed on the corporation
and/or its directors, trustees, stockholders, members, officers or employees
responsible for the violation or indispensable to its commission.
5.
Liability of Aiders and Abettors and Other Secondary Liability
• Anyone who shall aid, abet, counsel, command, induce or cause any violation
shall be punished with a fine not exceeding that imposed on the principal
offenders.
6. Reportorial Requirements of Corporations
•
Additional documents to be submitted by corporations vested with public
interest.
o Director or trustee compensation report
o Director or trustee appraisal or performance report
7.
Visitorial Power and Confidential Nature of Examination Results
• The SEC is provided with visitorial powers. If a corporation refuses or
obstructs the exercise of this power, the SEC may revoke the former’s
certificate of incorporation.
• No court below the Court of Appeals shall have jurisdiction to issue a restraining order, preliminary injunction or preliminary mandatory injunction in any case, dispute or controversy that directly or indirectly interferes with the exercise of the powers, duties and responsibilities of the SEC that falls exclusively within its jurisdiction.
• Powers, authorities and responsibilities of the Commission involving partylist organizations are transferred to the Commission on Elections.
H. Arbitration for Corporations
• An arbitration agreement may be provided in the articles of incorporation or bylaws of a corporation.
• When such an agreement is in place, disputes between the corporation, its stockholders or members, which arise from the implementation of the articles of incorporation or bylaws or from intra-corporate relations shall be referred to arbitration.
• A dispute shall be non-arbitrable when it involves criminal offenses and interests of third parties.
• To be enforceable, the arbitration agreement should indicate the number of arbitrators and the procedure for their appointment.
• The power to appoint the arbitrator forming the arbitral tribunal shall be granted to a designated independent third party. Should the third party fail to appoint the arbitrators in the manner and within the period specified in the arbitration agreement, the parties may request the Commission to appoint the arbitrators. In any case, arbitrators must be accredited or must belong to organizations accredited for the purpose of arbitration.
• When an intra-corporate dispute is filed with a Regional Trial Court, the court shall dismiss the case before the termination of the pretrial conference, if it determines that an arbitration agreement is written in the corporation’s articles of incorporation, bylaws or in a separate agreement.
• A final arbitral award under this section shall be executory after the lapse of 15 days from receipt thereof by the parties and shall be stayed only by the filing of a bond or the issuance by the appellate court of an injunctive writ.
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