Opinion No. 19-28 Re: Corporate Term of Existing Corporations under the Revised Corporation Code.

Republic of the Philippines

Departnient of Finance

Securities and Exchange Commission OFFICE OF THE GENERAL COUNSEL

22 July 2019

SEC-0GC Opinion No. 19-28 Corporations RE:Corporate under Term the of Existing Revised Corporation Code

Zambrano Gruba Caganda & Advincula 27/F 88 Corporate Center, 141 Sedeno Street, Salcedo Village, ZG Law

1229 Makati City, Philippines

Gentlemen:

opinion that: (a) the corporate term of Unlad Resources Development Corporation This refers to your letter dated 30 May 2019, requesting confirmation of your

(Unlad) expiring on 01 December 2020 is deemed extended and amended to perpetual existence pursuant to Republic Act No. 11232 or the Revised Corporation Code of the

amendment of Unlad's corporate term to perpetual existence does not require two-third Philippines ("RCC") without amending its Articles of Incorporation (AOI); and (b) the (2/3) affirmative vote of the outstanding shares of Unlad.

incorporated on 01 December 1920 with a corporate term of fifty (50) years expiring on 01 December 1970. 0n 15 November 1969, Unlad's corporate term was extended for Based on the amended AOI which you attached to your letter, Unlad was

another 50 years expiring on 01 December 2020. Given this situation, you opine that the

the requisite 2/3 affirmative vote of its outstanding shares, pursuant to the RcC. corporate term of Unlad is now deemed perpetual without need of amending its AOI with

and amended to perpetual existence pursuant to Paragraph 2, Section 11 of the RCC1, which provides: We confirm your opinion that the corporate term of Unlad is deemed extended

Section 11. Corporate Term. - A corporation shall have perpetual existence unless a vote of its stockholders representing a majority of its outstanding capital stock. under this section is without prejudice to the appraisal right of dissenting its articles of incorporation provide otherwise. Corporations with certificates of incorporation issued_prior to_the effectivity of this Code, and _which continue to exist shall have perpetual existence, unless the corporation, upon notifies the Commission that it elects to retain its specific corporate term pursuant to its articles of incorporation: Provided, that any change in the corporate term stockholders in accordance with the provisions of this Code. (Emphasis supplied) 1 Effective 23 February 2019

It is clear from the aforementioned provision that the corporate term of a corporation existing prior to, and which continues to exist upon the effectivity of the Rcc shall be automatically deemed perpetual without any further action on the part of the corporation.2

Further, since the automatic conversion of the corporate term to perpetual existence does not require an amendment of the A0I, the 2/3 affirmative vote3 of the outstanding shares to amend the AOI would not be required.

facts and circumstances disclosed and relevant solely to the particular issue raised It shall be understood that the foregoing opinion is rendered based solely on the

in other cases or upon the courts whether of similar or dissimilar circumstances.4 If upon therein. It shall not be used in the nature of a standing rule binding upon the Commission

further inquiry or investigation, it will be disclosed that the facts relied upon are different, this opinion shall be rendered void.

Please be guided accordingly.

CAMILO S. CORREA CMDV General Counsel M

legitimate purposes, any provision or matter stated in the articles of incorporation may be amended by a majority vote of the board of directors or trustees and the vote or written assent of the stockholders representing at least two-thirds (2/3) of the_outstanding capital stock, without prejudice to the appraisal right of dissenting stockholders in accordance with the 4 SEC Memorandum Circular No. 15 Series of 2003 (16 December 2003), No. 5.10 2 SEC-OGC Opinion No. 19-16 dated 15 April 2019 addressed to Paner Hosaka & Ypil provisions of this Code. (Emphasis supplied) 3 SEC. 15. Amendment of Articles of Incorporation. - Unless otherwise prescribed by this Code or by special law, and for