TITLE XIV

DISSOLUTION

GOVERNING LAWS-SECS 133-138 RCC

SEC. 133. Methods of Dissolution. – A corporation

formed or organized under the provisions of this

Code may be dissolved voluntarily or involuntarily.

PARTICULARS VOLUNTARY- VOLUNTARY- VOLUNTARY- INVOLUNTARY

NO CRs CRs SHORTENING
AFFECTED AFFECTED TERM
VOTES REQUIRED SEC 134 RCC SEC 135 RCC SEC 136 RCC
If dissolution of a Where the A voluntary
corporation does dissolution of a dissolution may
not prejudice the corporation may be effected by
rights of any prejudice the amending the
creditor having a rights of any articles of
claim against it, creditor, incorporation to
the dissolution The petition shall shorten
may be effected be signed by a the corporate
by majority vote majority of the term pursuant to
of the board of corporation’s the provisions of
directors or board of this
trustees, and by a directors or Code.
resolution trustees,
adopted and that its
by the affirmative dissolution was
vote of the resolved upon by
stockholders the affirmative
owning vote of the
at least majority stockholders
of the representing at
outstanding least two thirds
capital (2/3) of the
stock or majority outstanding
of the members capital stock or at
of least two-thirds
(2/3) of the
members
a meeting

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 MEETING to be held upon at a meeting
REQUIRED the call of the of its
directors or stockholders or
trustees. members called
for that
purpose.

At least twenty
NOTICE PRIOR TO (20) days prior to
MEETING the meeting,
notice shall be
given to each
shareholder or
member of
record
personally, by
registered
mail, or by any
means
authorized under
its by laws
whether or not
entitled to vote
at the
meeting, in the
manner provided
in Section 50
of this Code and
shall state that

the purpose of
CONTENTS OF the meeting is to
NOTICE vote on the
dissolution of the
corporation.

Notice of the
PUBLICATION OF time, place, and
NOTICE object of the
meeting shall be
published once
prior to the date
of the meeting in
a newspaper
published in the
place where the

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 principal office
of said
corporation is
located, or if no
newspaper is
published in such
place, in a
newspaper of
general
circulation in the
Philippines.

A verified request
VERIFIED REQUEST for dissolution a verified
shall be filed petition for
with the dissolution shall
Commission be filed with the
Commission.

-verified by its
president or
secretary or
one of its
directors or
trustees

CONTENTS OF stating:
VERIFIED REQUEST (a) the reason The petition shall
for likewise state:
the dissolution; (a) the
(b) the form, reason for the
manner, and time dissolution;
when the notices (b) the form,
were given; manner,
(c) names of the and time when
stockholders and the notices were
directors or given; and
members and (c) the
trustees, who date, place, and
approved the time of the
dissolution; meeting in which
(d) the the
date, place, and vote was made.
time of the
meeting in which and shall set
the forth all
vote was made; claims and

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 and demands against
(e) details of it
publication.

The corporation
shall submit the
REPORTORIAL following to The corporation A copy of the
REQUIREMENTS the Commission: shall submit to amended articles
(1) a copy of the the of
resolution Commission the incorporation
authorizing the following: shall be
dissolution, (1) a copy of the submitted to the
certified by a resolution Commission
majority of the authorizing the in accordance
board of dissolution, with this Code.
directors or certified by a
trustees majority of the
and board of
countersigned by directors or
the secretary of trustees and
the countersigned by
corporation; the secretary of
(2) proof of the corporation;
publication; and and
(3) (2) a list of all its
favorable creditors.
recommendation
from the
appropriate
regulatory
agency, when
necessary.

Within fifteen
(15) days from
APPROVAL BY SEC receipt of the
verified request
for dissolution,
and in the
absence of any
withdrawal
within said
period,
the Commission
shall approve the
request and

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 issue the
certificate of
dissolution.

The
dissolution shall
EFFECTIVITY OF take effect only The dissolution Upon the
DISSOLUTION upon the shall take effect expiration of the
issuance by the only upon the shortened term,
Commission of a issuance by the as
certificate of Commission of a stated in the
dissolution. certificate of approved
dissolution. amended articles
No application of
for dissolution of incorporation, the
banks, corporation shall
banking and be deemed
quasi-banking dissolved without
institutions, pre any further
need, insurance proceedings,
and trust subject
companies, non to the provisions
stock savings and of this Code on
loan associations, liquidation.
pawnshops, and
other financial In the case of
intermediaries expiration of
shall be approved corporate term,
by the dissolution shall
Commission automatically
unless take effect on
accompanied by the day following
a favorable the last day of the
recommendation corporate
of the term stated in the
appropriate articles of
government incorporation,
agency. without the need
for the issuance
by the
Commission of a
certificate of
dissolution.

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 ORDER AND If the petition is
HEARING WITH sufficient in form
PUBLICATION AND and substance,
POSTING the
REQUIREMENTS Commission
shall, by an order
reciting the
purpose
of the petition,
fix a deadline for
filing objections
to
the petition
which date shall
not be less than
thirty (30) days
nor more than
sixty (60) days
after the
entry of the
order. 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
the corporation 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 for
three (3)

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 consecutive
weeks in three
(3) public
places in such
municipality or
city.
Upon five (5)
days’ notice,
given after the
date on
which the right to
file objections as
fixed in the order
has expired,
the Commission
shall proceed to
hear
the petition and
try any issue
raised in the
objections filed;
and if no such
objection is
sufficient, and
the material
allegations of the
petition are true,
it shall render
judgment
dissolving
the corporation
and directing
such disposition
of its
assets as justice
requires, and
may appoint a
receiver to collect
such assets and
pay the debts of
the corporation.

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WITHDRAWAL- A withdrawal of A withdrawal of
SEC 137 RCC the request for the petition for
dissolution shall dissolution shall
be made in be
writing, duly in the form of a
verified by motion and
any incorporator, similar in
director, trustee, substance to
shareholder, or a withdrawal of
member and request for
signed by the dissolution but
same number of shall be
incorporators, verified and filed
directors, prior to
trustees, publication of the
shareholders, or order
members setting the
necessary to deadline for filing
request for objections to the
dissolution as petition.
set forth in the
foregoing
sections.

The withdrawal
shall be
submitted no
later than fifteen
(15) days
from receipt by
the Commission
of the request for
dissolution.

Upon receipt of a
withdrawal of
request
for dissolution,
the Commission
shall withhold
action on the
request for
dissolution and
shall, after
investigation:
(a) make a
pronouncement
that the

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 request for
dissolution is
deemed
withdrawn;
(b) direct a joint
meeting of the
board of
directors or
trustees and the
stockholders or
members for the
purpose of
ascertaining
whether to
proceed with
dissolution; or
(c) issue such
other orders as it
may
deem
appropriate.
SEC 138 RCC A corporation
MOTU may be dissolved
PROPRIO/VERIFIE by the Commission
D COMPLAINT motu proprio
or upon filing of a
verified complaint
by any
interested party.

GROUNDS The following may

be grounds
for dissolution of
the corporation:
(a)Non-use of
corporate charter
as provided
under Section 21 of
this Code;
(b)Continuous
inoperation of a
corporation as
provided under
Section 21 of this
Code;

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 (c)Upon receipt of
a lawful court
order
dissolving the
corporation;
(d)Upon finding by
final judgment that
the
corporation
procured its
incorporation
through
fraud;

(e)Upon finding by
final judgment that
the corporation:
(1) Was created for
the purpose of
committing,
concealing or
aiding the
commission of
securities
violations,
smuggling, tax
evasion,
money laundering,
or graft and corrupt
practices;
(2) Committed or
aided in the
commission of
securities
violations,
smuggling, tax
evasion,
money laundering,
or graft and corrupt
practices, and its
stockholders knew;
and
(3) Repeatedly and
knowingly
tolerated the
commission of graft
and corrupt
practices or

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 other fraudulent or
illegal acts by its
directors,
trustees, officers,
or employees.

FORFEITURE AND If the corporation is

OTHER PENALTIES ordered dissolved
by final
judgment pursuant
to the grounds set
forth in
subparagraph (e)
hereof, its assets,
after
payment of its
liabilities, shall,
upon petition of
the Commission
with the
appropriate court,
be
forfeited in favor of
the national
government.
Such forfeiture
shall be without
prejudice to the
rights of innocent
stockholders and
employees
for services
rendered, and to
the application of
other penalty or
sanction under this
Code or
other laws.

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REQUIRED The Commission
NOTICES shall give
reasonable notice
to, and coordinate
with, the
appropriate
regulatory agency
prior to the
involuntary
dissolution of
companies under
their special
regulatory
jurisdiction.

LIQUIDATION

GOVERNING LAW-SEC 139 RCC

Corporate Liquidation

Except for

banks, which shall be covered by the applicable

provisions of Republic Act No. 7653, otherwise

known as the “New Central Bank Act,” as amended,

and Republic Act No. 3591, otherwise known as the

Philippine Deposit Insurance Corporation Charter,

as amended, every corporation whose charter

expires pursuant to its articles of incorporation, is

annulled by forfeiture, or whose corporate

existence is terminated in any other manner, shall

nevertheless remain as a body corporate for three

(3) years after the effective date of dissolution,

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 forthe purpose of prosecuting and defending suits by

or against it and enabling it to settle and close its

affairs, dispose of and convey its property, and

distribute its assets, but not for the purpose of

continuing the business for which it was established.

At any time during said three (3) years, the

corporation is authorized and empowered to

convey all of its property to trustees for the benefit

of stockholders, members, creditors, and other

persons in interest.

After any such conveyance by the corporation of its property

in trust for the benefit of its stockholders, members, creditors and

others in interest, all interest which the corporation had in

the property terminates, the legal interest vests in

the trustees, and the beneficial interest in the

stockholders, members, creditors or other personsin-interest.

Except as otherwise provided for in Sections 93

and 94 of this Code, upon the winding up of

corporate affairs, any asset distributable to any

creditor or stockholder or member who is unknown

or cannot be found shall be escheated in favor of

the national government.

Except by decrease of capital stock and as

otherwise allowed by this Code, no corporation

shall distribute any of its assets or property

except upon lawful dissolution and

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after payment of all its debts and liabilities.

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