In particular, we will cover the following areas of concern:
a. Changes in the incorporation process of domestic and foreign companies, both stock & non-stock companies, classification of shares, rights, privileges, restrictions, number and qualification of incorporators, perpetual existence of corporations, minimum subscription and paid-up, number of directors & trustees, new rules on posting of security deposit for foreign corporations
b. Changes on the operating rules of corporation such as the establishment and operation of One Person Corporation, guidelines on the set-up, rules and procedures, manner, timing and place of voting of stockholders and directors, election, qualifications of directors and trustees, and other incidentals of operations such as increase in capital stock, amendment of by-laws, mergers and consolidations, reportorial requirements
c. Changes in the policies and guidelines on closure or dissolution, corporations with expired terms, renewals of life, delinquent corporation for failure to operate from the time of organization, new grounds for dissolution, imposable offenses and penalties
For the 2nd part of our topic, we will cover a number of SEC Legal Opinions issued from 2024 to present date. We will evaluate how some of the highlights of the Revised Corporation Code were incorporated into these issuances.
In particular, we will cover the following areas of concern:
a. Key distinctions between a loan and an investment in debt securities, particularly in relation to whether a Corporate Debt Vehicle (CDV) may engage in direct lending
b. Regulatory requirements for a private corporation to operate as a financing company, in relation to Financing Company Act
c. Determination of what constitutes a quorum in corporate meetings
d. What constitutes retail trade under the Retail Trade Liberalization Act of 2000
f. What is a public utility and the limitations on the foreign investor's capacity to sit as the President
g. Definition of bitcoin and its possible classification as security
h. Registration requirements for corporations seeking to offer for sale or distribution securities within the Philippines
i. Applicability of the Rules on Material Related Party Transactions for Publicly-Listed Companies (“MRPT”)
j. Foreign ownership restrictions for entities engaged in mass media and advertising
k. Corporation is allowed to buy back its shares following automatic delisting, subject to legal requirements and protection of shareholder rights
l. Paid-up capital under the Retail Trade Liberalization Act includes all capital contributions made by shareholders, which is used to determine eligibility for foreign investment
m. Definition of Mandatory Tender Offer Rule and its application
n. The required number of directors for a financing company
o. Additional paid-in capital and its role in determining compliance with the foreign equity ownership limits for corporation engaged in land or real estate business
p. Retained earnings may be appropriated for contingencies, provided the purpose is clearly defined and approved by the board of directors
q. Foreign national may be appointed as chairman of a corporation engaged in a partially nationalized activity, provided the equity participation does not exceed the allowable equity participation or exercise control in violation of the Anti-Dummy Law
r. Prohibition on foreign nationals from managing or controlling a micro-finance NGO under the Anti-Dummy Law
s. Minimum paid-in capital requirements and their applicability to foreign-owned corporations seeking to engage in domestic market enterprises
t. Incomplete number of independent directors serving in the Board of Directors (BOD)
u. Issuance of speculative securities and the declaration of exemption from the applicability of Section 10.3 of the Securities Regulation Code (SRC)
v. Articles of Incorporation (AOI) and the determination of the business activities a corporation may legally engage in, as defined in its purpose clause
w. Mineral processing and the restrictions on permissible foreign equity participation
x. The total amount of credit a financing company may extend for real estate transactions
y. Creation of a local position for an Assistant Secretary in a representative office
z. What is 19-Lender Rule and its applicability
aa. Term limits for directors of country clubs classified as stock corporations
bb. The activities of a representative office and the restrictions on engaging in income-generating activities within the Philippines
cc. Legality and Regulatory Compliance of Income-Generating Activities of a Non-Stock, Non-Profit Corporations
dd. The applicability of the Financing Company Act to a Corporation Acting Solely as an Agent for Lending Institutions and whether such activities require registration as a financing company under Philippine Law
ee. The classification of a corporation as a Domestic Market Enterprise, whether as a wholly or partially nationalized activity
ff. The Anti-Dummy Law, and its enforcement in nationalized and partly nationalized industries
gg. Definition of a single outlet and the regulatory constraints on single outlet sales under the Retail Trade Liberalization Act of 2000
hh. Qualifications of the Board of Directors, and the capacity of a foreign national to sit as a director in the airline industry
ii. Effects of corporate restructuring involving a domestic corporation engaged in the rice and corn industry
jj. Shareholders’ right to inspect corporate books and records, including the scope and limitations of this right
