Section 120. Dissolution by shortening corporate term. – A voluntary Section 120 139.

ion 120 139. WITHRAWAL OF REQUEST FOR Dissolution by - removed the provision regarding the
dissolution may be effected by amending the articles of incorporation to shortening corporate term AND WITHDRAWAL OF PETITION FOR guidelines on dissolution by shortening
shorten the corporate term pursuant to the provisions of this Code. A copy of DISSOLUTION. – A voluntary dissolution may be effected by amending the corporate term and incorporated this to
the amended articles of incorporation shall be submitted to the Securities and articles of incorporation to shorten the corporate term pursuant to the previous section
Exchange Commission in accordance with this Code. Upon approval of the provisions of this Code. A copy of the amended articles of incorporation shall
- replaced this section by guidelines on the
amended articles of incorporation of the expiration of the shortened term, as be submitted to the Securities and Exchange Commission in accordance with
withdrawal of request for dissolution and
the case may be, the corporation shall be deemed dissolved without any this Code. Upon approval of the amended articles of incorporation of the
withdrawal of petition for dissolution
further proceedings, subject to the provisions of this Code on liquidation. expiration of the shortened term, as the case may be, the corporation shall
be deemed dissolved without any further proceedings, subject to the
provisions of this Code on liquidation.

A WITHDRAWAL OF THE REQUEST FOR DISSOLUTION SHALL:

a. BE MADE IN WRITING;

b. BE DULY VERIFIED BY ANY INCORPORATOR, DIRECTOR,

SHAREHOLDER OR MEMBER;

c. HAVE THE SIGNATURES OF THE SAME NUMBER OF

INCORPORATORS, DIRECTORS, SHAREHOLDERS OR MEMBERS
NECESSARY TO REQUEST FOR A DISSOLUTION AS SET FORTH IN
THE FOREGOING SECTIONS; AND

d. BE SUBMITTED WITHIN FIFTEEN (15) DAYS FROM THE RECEIPT

BY THE COMMISSION OF THE REQUEST FOR DISSOLUTION.

UPON RECEIPT OF A DULY SUBMITTED WITHDRAWAL OF REQUEST

FOR DISSOLUTION, THE COMMISSION SHALL WITHHOLD ACTION ON
THE REQUEST FOR DISSOLUTION AND SHALL, AFTER
INVESTIGATION, ISSUE AN ORDER:

a. WITHHOLDING THE ISSUANCE OF THE CERTIFICATE OF

DISSOLUTION AND DEEMING THE REQUEST FOR DISSOLUTION
WITHDRAWN; OR

b. DIRECTING THAT A JOINT MEETING OF THE BOARD AND OF THE

 STOCKHOLDERS BE HELD FOR THE PURPOSE OF ASCERTAINING
WHETHER OR NOT TO PROCEED WITH DISSOLUTION.

THE COMMISSION SHALL HAVE THE POWER TO ISSUE SUCH

ORDERS AS MAY BE APPROPRIATE, INCLUDING, WITHOUT
LIMITATION, ORDERS DESIGNATING THE TIME AND PLACE OF THE
JOINT MEETING, DIRECTING THE SENDING OF NOTICES, AND
SPECIFYING THE FORM OF SUCH NOTICE. THE CONDUCT OF THE
JOINT MEETING SHALL BE SUPERVISED BY THE COMMISSION
THROUGH A DULY AUTHORIZED REPRESENTATIVE WHO SHALL,
IMMEDIATELY AFTER THE JOINT MEETING, CERTIFY ITS OUTCOME
WITH A RECOMMENDATION AS TO WHETHER THE CERTIFICATE OF
DISSOLUTION SHOULD BE ISSUED OR THE REQUEST FOR
DISSOLUTION BE DEEMED ABANDONED. THEREAFTER, THE
COMMISSION SHALL ISSUE AN ORDER EITHER APPROVING THE
WITHDRAWAL OF THE REQUEST OR A CERTIFICATE OF
DISSOLUTION OR PROCEEDING TO ACT ON SUCH REQUEST.

A MOTION FOR THE WITHDRAWAL OF THE PETITION FOR

DISSOLUTION SHALL BE SIMILAR IN SUBSTANCE AS A WITHDRAWAL
OF REQUEST FOR DISSOLUTION BUT SHALL BE VERIFIED AND FILED
PRIOR TO PUBLICATION OF THE ORDER SETTING THE DATE FOR
OBJECTIONS TO THE PETITION. THE COMMISSION SHALL RESOLVE
THE MOTION WITHIN THE SAME PROCEEDINGS AS THE PETITION
AND ISSUE AN ORDER DEEMING THE PETITION WITHDRAWN OR
DENYING THE WITHDRAWAL AND
PROCEEDING TO HEAR OBJECTIONS ON THE PETITION.
Section 121. Involuntary dissolution. – A corporation may be dissolved by the Section 121 140. Involuntary dissolution DISSOLUTION BY THE - included further guidelines as to the
Securities and Exchange Commission upon filing of a verified complaint and COMMISSION. – A corporation may be dissolved by the Securities and dissolution of the corporation by the SEC
after proper notice and hearing on the grounds provided by existing laws, Exchange DISSOLUTION PROCEEDINGS PURSUANT TO THE
rules and regulations. GROUNDS SET FORTH IN SECTION 136 (4) AND (5), SECTION 173, OR
WHEN PROVIDED IN OTHER LAWS, RULES AND REGULATIONS, MAY
BE COMMENCED BY THE Commission MOTU PROPRIO OR upon filing of
a verified complaint BY ANY INTERESTED PARTY. and after

AFTER proper notice and hearing, THE COMMISSION MAY DISSOLVE

THE CORPORATION OR ISSUE SUCH OTHER ORDER AS IT MAY DEEM
APPROPRIATE IN ACCORDANCE WITH THE PROVISIONS OF
THIS CODE OR THE RULES AND REGULATIONS OF THE
 COMMISSION.

IF THE CORPORATION IS DISSOLVED BY THE COMMISSION

PURSUANT TO ANY OF THE GROUNDS SET FORTH IN SECTION 136
(4) (B) TO (I), ITS ASSETS, AFTER PAYMENT OF ITS OUTSTANDING
LIABILITIES, SHALL BE FORFEITED IN FAVOR OF THE COMMISSION.
SUCH FORFEITURE SHALL BE WITHOUT PREJUDICE TO ANY OTHER
PENALTY OR SANCTION FOR THOSE LIABLE UNDER THIS CODE OR
OTHER LAWS. on the grounds provided by existing laws, rules and
regulations.
Section 122. Corporate liquidation. – Every corporation whose charter Section 122 141. Corporate liquidation. – Every corporation whose charter - revised to indicate that in case of any asset
expires by its own limitation or is annulled by forfeiture or otherwise, or whose expires by its own limitation or is annulled by forfeiture or otherwise, or whose distributable to unknown stockholder or
corporate existence for other purposes is terminated in any other manner, corporate existence for other purposes is terminated in any other manner, member, such will be distributed in favor of
shall nevertheless be continued as a body corporate for three (3) years after shall nevertheless be continued as a body corporate for three (3) years after the national government rather than city or
the time when it would have been so dissolved, for the purpose of prosecuting the time when it would have been so dissolved EFFECTIVE DATE OF minicipality where such assets are located
and defending suits by or against it and enabling it to settle and close its DISSOLUTION AS PROVIDED IN SECTION 136 OF THIS
affairs, to dispose of and convey its property and to distribute its assets, but CODE, for the purpose of prosecuting and defending suits by or against it and
not for the purpose of continuing the business for which it was established. enabling it to settle and close its affairs, to dispose of and convey its property
and to 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 At any time during said three (3) years, the corporation is authorized and
stockholders, members, creditors, and other persons in interest. From and empowered to convey all of its property to trustees for the benefit of
after any such conveyance by the corporation of its property in trust for the stockholders, members, creditors, and other persons in interest. From and
benefit of its stockholders, members, creditors and others in interest, all after any such conveyance by the corporation of its property in trust for the
interest which the corporation had in the property terminates, the legal interest benefit of its stockholders, members, creditors and others in interest, all
vests in the trustees, and the beneficial interest in the stockholders, members, interest which the corporation had in the property terminates, the legal interest
creditors or other persons in interest. vests in the trustees, and the beneficial interest in the stockholders, members,
creditors or other persons in interest.
Upon the winding up of the corporate affairs, any asset distributable to any
creditor or stockholder or member who is unknown or cannot be found shall EXCEPT AS OTHERWISE PROVIDED FOR IN SECTIONS 95 AND 96 OF
be escheated to the city or municipality where such assets are located. THIS CODE, upon the winding up of the corporate affairs, any asset
distributable to any creditor or stockholder or member who is unknown or
Except by decrease of capital stock and as otherwise allowed by this Code, cannot be found shall be escheated to the city or municipality where such
no corporation shall distribute any of its assets or property except upon lawful assets are located IN FAVOR OF THE NATIONAL GOVERNMENT.
dissolution and after payment of all its debts and liabilities.
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 after payment of all its debts and liabilities
Section 125 is amended to delete “Securities and Exchange” from “Securities and Exchange Commission” in each instance. Further, Sections 123, 124
and 125 of the Code are renumbered as Sections 142, 143 and 144, respectively.

Section 126. Issuance of a license. – If the Securities and Exchange Section 126 145. Issuance of a license. – If the Securities and Exchange - revised the initial amount of the securities
Commission is satisfied that the applicant has complied with all the Commission is satisfied that the applicant has complied with all the deposit from Php100k to Php500k
requirements of this Code and other special laws, rules and regulations, the requirements of this Code and other special laws, rules and regulations, the
- revised the based amount of gross
Commission shall issue a license to the applicant to transact business in the Commission shall issue a license to the applicant to transact business in the
income for the additional securities deposit
Philippines for the purpose or purposes specified in such license. Upon Philippines for the purpose or purposes specified in such license. Upon
from Php5M to 10M
issuance of the license, such foreign corporation may commence to transact issuance of the license, such foreign corporation may commence to transact
business in the Philippines and continue to do so for as long as it retains its business in the Philippines and continue to do so for as long as it retains its - included a reference to the guidelines on
authority to act as a corporation under the laws of the country or state of its authority to act as a corporation under the laws of the country or state of its securities deposit issued by the SEC
incorporation, unless such license is sooner surrendered, revoked, incorporation, unless such license is sooner surrendered, revoked,
suspended or annulled in accordance with this Code or other special laws. suspended or annulled in accordance with this Code or other special laws.

Within sixty (60) days after the issuance of the license to transact business in Within sixty (60) days after the issuance of the license to transact business in
the Philippines, the license, except foreign banking or insurance corporation, the Philippines, the license, except foreign banking or insurance corporation,
shall deposit with the Securities and Exchange Commission for the benefit of shall deposit with the Securities and Exchange Commission for the benefit of
present and future creditors of the licensee in the Philippines, securities present and future creditors of the licensee in the Philippines, securities
satisfactory to the Securities and Exchange Commission, consisting of bonds satisfactory to the Securities and Exchange Commission, consisting of bonds
or other evidence of indebtedness of the Government of the Philippines, its or other evidence of indebtedness of the Government of the Philippines, its
political subdivisions and instrumentalities, or of government-owned or political subdivisions and instrumentalities, or of government-owned or
controlled corporations and entities, shares of stock in “registered controlled corporations and entities, shares of stock OR DEBT
enterprises” as this term is defined in Republic Act No. 5186, shares of stock SECURITIES THAT ARE REGISTERED UNDER THE
in domestic corporations registered in the stock exchange, or shares of stock SECURITIES REGULATION CODE in “registered enterprises” as this term
in domestic insurance companies and banks, or any combination of these is defined in Republic Act No. 5186, shares of stock in domestic corporations
kinds of securities, with an actual market value of at least one hundred registered LISTED in the stock exchange, or shares of stock in domestic
thousand (P100,000.) pesos; Provided, however, That within six (6) months insurance companies and banks, OR ANY FINANCIAL INSTRUMENT
after each fiscal year of the licensee, the Securities and Exchange DETERMINED SUITABLE BY THE COMMISSION, or any
Commission shall require the licensee to deposit additional securities combination THEREOF of these kinds of securities, with an actual market
equivalent in actual market value to two (2%) percent of the amount by which value of at least one FIVE hundred thousand (P100,000.) (P500,000.) pesos
the licensee’s gross income for that fiscal year exceeds five million OR SUCH OTHER AMOUNT THAT MAY BE SET BY THE
(P5,000,000.00) pesos. The Securities and Exchange Commission shall also COMMISSION; Provided, however, That within six (6) months after each
require deposit of additional securities if the actual market value of the fiscal year of the licensee, the Securities and Exchange Commission shall
securities on deposit has decreased by at least ten (10%) percent of their require the licensee to deposit additional securities equivalent in actual
actual market value at the time they were deposited. The Securities and market value to two (2%) percent of the amount by which the licensee’s gross
Exchange Commission may at its discretion release part of the additional income for that fiscal year exceeds five TEN million (P5,000,000.00)
securities deposited with it if the gross income of the licensee has decreased, (P10,000,000.) pesos. The Securities and Exchange Commission shall also
or if the actual market value of the total securities on deposit has increased, require THE deposit of additional securities OR FINANCIAL
by more than ten (10%) percent of the actual INSTRUMENTS if the actual market value of the securities OR FINANCIAL
market value of the securities at the time they were deposited. The INSTRUMENTS on deposit has decreased by at least ten (10%) percent of
Securities and Exchange Commission may, from time to time, allow the their actual market value at the time they were deposited. The Securities and
licensee to substitute other securities for those already on deposit as long as Exchange Commission may at its discretion release part of the additional
the licensee is solvent. Such licensee shall be entitled to collect the interest securities deposited with it if the gross income of the licensee has decreased,
or dividends on the securities deposited. In the event the licensee ceases to or if the actual market value of the total securities on deposit has increased,
do business in the Philippines, the securities deposited as aforesaid shall be by more than ten (10%) percent of theIR actual market value of the securities
returned, upon the licensee’s application therefor and upon proof to the at the time they were deposited. The Securities and Exchange Commission
satisfaction of the Securities and Exchange Commission that the licensee has may, from time to time, allow the licensee to MAKE substitute DEPOSITS
no liability to Philippine residents, including the Government of the Republic other securities for those already on deposit as long as the licensee is solvent.
of the Philippines. Such licensee shall be entitled to collect the interest or dividends on the
SUCH securities depositSed. In the event the licensee ceases to do business
in the Philippines, ITS the securities depositSed as aforesaid shall be
returned, upon the licensee’s application therefor and upon proof to the
satisfaction of the Securities and Exchange Commission that the licensee has
no liability to Philippine residents, including the Government of the Republic
of the Philippines. FOR PURPOSES OF COMPUTING THE SECURITIES
DEPOSIT, THE COMPOSITION OF GROSS INCOME AND ALLOWABLE
DEDUCTIONS THEREFROM SHALL BE IN ACCORDANCE WITH THE
RULES OF THE COMMISSION.

Sections 128, 130, 131, 132, 134, 135, and 136 of the Code are amended to delete “Securities and Exchange” from “Securities and Exchange
Commission” in each instance. Further, Sections 127 to 136 are hereby renumbered as Sections 146 to 155 accordingly.

(A NEW TITLE IS INSERTED IN THE CODE CONTAINING SECTIONS TITLE XVI – INVESTIGATIONS, OFFENSES AND PENALTIES - included additional title for the guidelines
156 TO 172) and procedure regarding investigations,
“Sec. 156. INVESTIGATION AND PROSECUTION OF OFFENSES. – THE offenses and penalties to be imposed by the
COMMISSION MAY, UPON COMPLAINT OR MOTU PROPRIO, MAKE SEC
SUCH INVESTIGATIONS AS IT DEEMS NECESSARY TO DETERMINE
WHETHER ANY PERSON HAS VIOLATED OR IS ABOUT TO VIOLATE
ANY PROVISION OF THIS CODE, ANY RULE, REGULATION OR
ORDER THEREUNDER, AND MAY REQUIRE OR PERMIT ANY PERSON
TO FILE WITH IT A STATEMENT IN WRITING, UNDER OATH OR
OTHERWISE, AS THE COMMISSION SHALL DETERMINE, AS TO ALL
FACTS AND CIRCUMSTANCES CONCERNING THE MATTER TO BE
INVESTIGATED.

THE COMMISSION MAY PUBLISH INFORMATION CONCERNING ANY

SUCH VIOLATIONS, AND TO INVESTIGATE ANY FACT, CONDITION,
PRACTICE OR MATTER WHICH IT MAY DEEM NECESSARY OR
PROPER TO AID IN THE ENFORCEMENT OF THE PROVISIONS OF
THIS CODE, IN THE PRESCRIBING OF RULES AND REGULATIONS
THEREUNDER, OR IN SECURING INFORMATION TO SERVE AS A
BASIS FOR RECOMMENDING FURTHER LEGISLATION CONCERNING
THE MATTERS TO WHICH THIS CODE RELATES: PROVIDED,
HOWEVER, THAT ANY PERSON REQUESTED OR SUBPOENAED TO
PRODUCE DOCUMENTS OR TESTIFY IN ANY INVESTIGATION SHALL
SIMULTANEOUSLY BE NOTIFIED IN WRITING OF THE PURPOSE OF
SUCH INVESTIGATION: PROVIDED, FURTHER, THAT ALL CRIMINAL
COMPLAINTS FOR VIOLATION OF THIS CODE, AND THE
IMPLEMENTING RULES AND REGULATIONS ENFORCED OR
ADMINISTERED BY THE COMMISSION SHALL BE REFERRED TO THE
DEPARTMENT OF JUSTICE FOR PRELIMINARY INVESTIGATION AND
PROSECUTION BEFORE THE PROPER COURT: PROVIDED,
FURTHERMORE, THAT IN INSTANCES WHERE THE LAW ALLOWS
INDEPENDENT CIVIL OR CRIMINAL PROCEEDINGS OF VIOLATIONS
ARISING FROM THE SAME ACT, THE COMMISSION SHALL TAKE
APPROPRIATE ACTION TO IMPLEMENT THE SAME.

SEC. 157. ADMINISTRATION OF OATHS, AND SUBPOENA OF

WITNESSES AND DOCUMENTS. – FOR THE PURPOSE OF THE
INVESTIGATIONS IN THE PRECEDING SECTION, OR ANY OTHER
PROCEEDING UNDER THIS CODE, THE COMMISSION OR ANY
OFFICER DESIGNATED BY IT IS EMPOWERED TO ADMINISTER
OATHS AND AFFIRMATIONS, SUBPOENA WITNESSES, COMPEL
ATTENDANCE, TAKE EVIDENCE, REQUIRE THE PRODUCTION OF
ANY BOOK, PAPER, CORRESPONDENCE, MEMORANDUM, OR
OTHER RECORD WHICH THE COMMISSION DEEMS RELEVANT OR
MATERIAL TO THE INQUIRY, AND TO PERFORM SUCH OTHER ACTS
NECESSARY IN THE CONDUCT OF SUCH INVESTIGATION OR
PROCEEDINGS.

SECTION 158. CEASE AND DESIST ORDERS. – WHENEVER IT SHALL

APPEAR TO THE COMMISSION THAT ANY PERSON HAS ENGAGED OR
IS ABOUT TO ENGAGE IN ANY ACT OR PRACTICE CONSTITUTING A
VIOLATION OF ANY PROVISION OF THIS CODE, ANY RULE,
REGULATION OR ORDER THEREUNDER, IT MAY ISSUE AN ORDER
FOR SUCH PERSON TO DESIST FROM COMMITTING SUCH ACT OR
PRACTICE. AFTER FINDING THAT SUCH PERSON HAS ENGAGED IN
ANY SUCH ACT OR PRACTICE AND THAT THERE IS A REASONABLE
LIKELIHOOD OF SUCH PERSON CONTINUING FURTHER OR FUTURE
VIOLATIONS, THE COMMISSION MAY ISSUE, EX PARTE A CEASE AND
DESIST ORDER ENJOINING SUCH PERSON FROM FURTHER OR
FUTURE VIOLATIONS FOR A MAXIMUM PERIOD OF TWENTY (20)
DAYS.

THEREAFTER, THE COMMISSION MAY PROCEED

ADMINISTRATIVELY AGAINST SUCH PERSON IN ACCORDANCE WITH
SECTION 160, AND/OR TRANSMIT SUCH EVIDENCE AS MAY BE
AVAILABLE CONCERNING ANY VIOLATION OF ANY PROVISION OF
THIS CODE, OR ANY RULE, REGULATION OR ORDER THEREUNDER,
TO THE DEPARTMENT OF JUSTICE, WHICH MAY INSTITUTE THE
APPROPRIATE CRIMINAL PROCEEDINGS UNDER THIS CODE,
AND/OR TO THE PROPER COURT, TRIBUNAL, OR QUASI-JUDICIAL
AGENCY IN INSTANCES WHERE THE LAW ALLOWS INDEPENDENT
CIVIL OR CRIMINAL PROCEEDINGS OF VIOLATIONS ARISING FROM
THE SAME ACT.

SEC. 159. CONTEMPT. – ANY PERSON WHO, WITHIN HIS POWER BUT
WITHOUT JUSTIFIABLE OR LAWFUL CAUSE, FAILS OR REFUSES TO
COMPLY WITH ANY LAWFUL ORDER, DECISION OR SUBPOENA
ISSUED BY THE COMMISSION SHALL, AFTER DUE NOTICE AND
HEARING, BE GUILTY OF CONTEMPT OF THE COMMISSION. SUCH
PERSON SHALL BE FINED IN SUCH AMOUNT AS THE COMMISSION
MAY DETERMINE. WHEN THE FAILURE OR REFUSAL IS A CLEAR
AND OPEN DEFIANCE OF THE COMMISSION’S ORDER, DECISION OR
SUBPOENA, THE PERSON SHALL BE FINED ON A DAILY BASIS IN AN
AMOUNT THE COMMISSION MAY DETERMINE AND DETAINED
UNDER AN ARREST ORDER ISSUED BY THE COMMISSION UNTIL
SUCH ORDER, DECISION OR SUBPOENA IS COMPLIED WITH.

SEC. 160. ADMINISTRATIVE SANCTIONS. – IF, AFTER DUE NOTICE

AND HEARING INITIATED EITHER BY COMPLAINT OR MOTU
PROPRIO, THE COMMISSION FINDS THAT ANY PROVISION OF THIS
CODE, OR ANY OF THE COMMISSION’S RULES OR ORDERS HAS
BEEN VIOLATED, THE COMMISSION MAY IMPOSE ANY OR ALL OF
THE FOLLOWING SANCTIONS ON THOSE FOUND RESPONSIBLE FOR
THE VIOLATION:
(A) A FINE RANGING FROM FIVE THOUSAND PESOS (PHP5,000.00)
TO TWO MILLION PESOS (PHP2,000,000.00) PLUS NOT MORE THAN
ONE THOUSAND PESOS (PHP1,000.00) FOR EACH DAY OF
CONTINUING VIOLATION, IN NO CASE TO EXCEED TWO MILLION
PESOS (PHP2,000,000.00);

(B) ARREST AND DETENTION IN CONNECTION WITH ITS CONTEMPT

POWER UNDER SECTION 159;

(C) SUSPENSION OR REVOCATION OF THE CERTIFICATE OF

INCORPORATION;

(D) DISSOLUTION OF THE CORPORATION AND FORFEITURE OF ITS

ASSETS UNDER THE CONDITIONS IN TITLE XV OF THIS CODE; AND

(E) OTHER PENALTIES WITHIN THE POWER OF THE COMMISSION TO

IMPOSE OR AS PRESCRIBED IN ITS RULES AND REGULATIONS.

THE IMPOSITION OF THE FOREGOING ADMINISTRATIVE SANCTIONS

SHALL BE WITHOUT PREJUDICE TO THE FILING OF CIVIL
COMPLAINTS AND/OR CRIMINAL CHARGES UNDER THIS CODE AND
OTHER LAWS AGAINST THE CORPORATION AND/OR THOSE
RESPONSIBLE FOR THE VIOLATION, IN INSTANCES WHERE THE
LAW ALLOWS INDEPENDENT CIVIL OR CRIMINAL PROCEEDINGS OF
VIOLATIONS ARISING FROM THE SAME ACT.

SEC. 161. CONTINUED AND UNJUSTIFIED USE OF FORMER

CORPORATE NAME; PENALTIES. – A CORPORATION THAT
CONTINUES TO USE A CORPORATE NAME ALREADY PREVIOUSLY
REMOVED FROM REGISTRATION OR RESERVATION SHALL BE
PUNISHED WITH A FINE RANGING FROM FIFTY THOUSAND PESOS
(PHP50,000.00) TO TWO HUNDRED THOUSAND PESOS
(PHP200,000.00) AND/OR IMPRISONMENT OF SIX (6) MONTHS TO
TWO (2) YEARS AT THE DISCRETION OF THE COURT; PROVIDED
THAT THE CORPORATION MAY CLAIM THE DEFENSE THAT IT, OR
ANY OF ITS STOCKHOLDERS OR OTHER DIRECTORS/OFFICERS
EXERTED REASONABLE EFFORTS AGAINST THE CONTINUED AND
UNJUSTIFIED USE OF THE FORMER CORPORATE NAME, IN WHICH
CASE ONLY THE RESPONSIBLE DIRECTORS/OFFICERS SHALL BE
HELD CRIMINALLY LIABLE UNDER THIS PROVISION.

Sec. 162. CONCEALMENT OF DISQUALIFICATION; PENALTIES. –

EACH WILLFUL OR DELIBERATE CONCEALMENT BY A DIRECTOR
OR TRUSTEE OF ANY DISQUALIFICATION UNDER SECTION 27
ALREADY EXISTING AT THE TIME HE ACCEPTED THE POST, SHALL
BE PUNISHED BY A FINE RANGING FROM FIFTY THOUSAND PESOS
(PHP50,000.00) TO TWO HUNDRED THOUSAND PESOS
(PHP200,000.00) AND/OR IMPRISONMENT OF SIX (6) MONTHS TO
TWO (2) YEARS AT THE DISCRETION OF THE COURT, AND BY A
PERMANENT DISQUALIFICATION FROM FURTHER ACTING AS
DIRECTOR OF ANY CORPORATION. FOR PURPOSES OF THIS
SECTION, CONCEALMENT SHALL BE WILLFUL OR DELIBERATE
WHEN, DESPITE HAVING KNOWLEDGE OF THE EXISTENCE OF THE
DISQUALIFICATION, THE DIRECTOR OR TRUSTEE ACCEPTS THE
POST.

Sec. 163. VIOLATION OF DUTY TO KEEP OR MAINTAIN RECORDS

AND/OR ALLOW THEIR INSPECTION OR REPRODUCTION;
PENALTIES. – THE UNJUSTIFIED FAILURE OR REFUSAL BY THE
CORPORATION, OR BY THOSE RESPONSIBLE FOR KEEPING AND
MAINTAINING THE CORPORATION’S RECORDS, TO COMPLY WITH
SECTIONS 46, 74, 93, 180 AND OTHER PROVISIONS OF THIS CODE
AND THE RULES OF THE COMMISSION WITH RESPECT TO THE
RETENTION, MAINTENANCE AND KEEPING OF RECORDS AND
ALLOWING THEIR INSPECTION OR REPRODUCTION, AS THE CASE
MAY BE, SHALL BE PUNISHED WITH A FINE RANGING FROM FIFTY
THOUSAND PESOS (PHP50,000.00) TO FIVE HUNDRED THOUSAND
PESOS (PHP500,000.00) AND IMPRISONMENT OF THIRTY (30) DAYS
TO TWO (2) YEARS AT THE DISCRETION OF THE COURT.
THE PENALTIES IMPOSED UNDER THIS SECTION SHALL BE IN
ADDITION TO THE SANCTIONS IMPOSED BY THE COMMISSION IN
THE EXERCISE OF ITS CONTEMPT POWERS UNDER SECTION 159 TO
COMPEL COMPLIANCE WITH THE DUTIES UNDER THE MENTIONED
PROVISIONS.

SEC. 164. KNOWING OR WILLFUL CERTIFICATION OF INCOMPLETE,

INACCURATE, FALSE OR MISLEADING STATEMENTS OR REPORTS;
PENALTIES. – ANY PERSON WHO CERTIFIES ANY REPORT OR
MATTER AS SET FORTH IN THIS CODE KNOWING, OR BEING IN A
POSITION TO KNOW, THAT THE SAME IS INCOMPLETE, INACCURATE,
OR CONTAINS FALSE OR MISLEADING INFORMATION OR
STATEMENTS SHALL BE PUNISHED WITH A FINE RANGING FROM
TWO HUNDRED THOUSAND PESOS (PHP200,000.00) TO TWO MILLION
PESOS (PHP2,000,000.00) AND/OR IMPRISONMENT OF TWO
(2) TO TEN (10) YEARS. WHEN THE VIOLATION IS WILLFUL, THE
PENALTY SHALL BE A FINE RANGING FROM FOUR HUNDRED
THOUSAND PESOS (PHP400,000.00) TO FOUR MILLION PESOS
(PHP4,000,000.00) AND/OR IMPRISONMENT OF FOUR (4) TO TWENTY
(20) YEARS.

SEC. 165. INDEPENDENT AUDITOR COLLUSION; PENALTIES. – WHEN

AN INDEPENDENT AUDITOR COLLUDES WITH A CORPORATION OR
ITS REPRESENTATIVES AND CERTIFIES THE CORPORATION’S
FINANCIAL STATEMENTS WHICH ARE EITHER INCOMPLETE OR
WHICH CONTAIN INACCURATE, FALSE OR MISLEADING
STATEMENTS OR REPORTS, OR WHICH DO NOT GIVE A FAIR AND
ACCURATE PRESENTATION OF THE CORPORATION’S CONDITION,
SUCH AUDITOR SHALL BE PUNISHED WITH A FINE RANGING FROM
FOUR HUNDRED THOUSAND PESOS (PHP400,000.00) TO FOUR
MILLION PESOS (PHP4,000,000.00) AND/OR IMPRISONMENT OF FOUR
(4) TO TWENTY (20) YEARS.

SEC. 166. PROCURING THE ORGANIZATION OF A CORPORATION

THROUGH FRAUD; PENALTIES. – THOSE RESPONSIBLE FOR
PROCURING THE ORGANIZATION OF A CORPORATION THROUGH
FRAUD, OR ASSISTING DIRECTLY OR INDIRECTLY THEREIN, SHALL
BE PUNISHED WITH A FINE RANGING FROM FIVE HUNDRED
THOUSAND PESOS (PHP500,000.00) TO TWO MILLION PESOS
(PHP2,000,000.00) AND/OR IMPRISONMENT OF TWO (2) TO TEN (10)
YEARS AT THE DISCRETION OF THE COURT.

Sec. 167. FRAUDULENT OR UNLAWFUL CONDUCT OF BUSINESS;

PENALTIES. – A CORPORATION THAT WILLFULLY CONDUCTS ITS
BUSINESS IN A FRAUDULENT OR OTHERWISE UNLAWFUL MANNER
SHALL BE PUNISHED WITH A FINE RANGING FROM FIVE HUNDRED
THOUSAND PESOS (PHP500,000.00) TO TWO MILLION PESOS
(PHP2,000,000.00) AND/OR IMPRISONMENT OF FIVE (5) TO TEN (10)
YEARS AT THE DISCRETION OF THE COURT.

Sec. 168. THEFT OF IDENTITY; PENALTIES. – ANY CORPORATION

WHO WILLFULLY OBTAINS ANY IDENTIFYING INFORMATION OF A
PERSON, WHETHER NATURAL OR JURIDICAL, AND USES THAT
INFORMATION FOR ANY UNLAWFUL PURPOSE, INCLUDING BUT NOT
LIMITED TO OBTAINING, OR ATTEMPTING TO OBTAIN, CREDIT,
GOODS, SERVICES, OR REAL PROPERTY WITHOUT THE CONSENT OF
THAT PERSON, SHALL BE PUNISHED WITH A FINE RANGING FROM
ONE MILLION PESOS (PHP1,000,000.00) TO FIVE MILLION PESOS
(PHP5,000,000.00) AND IMPRISONMENT OF TEN (10) YEARS. THE
SAME PENALTY SHALL BE IMPOSED WHEN THE OFFENDER IS A
NATURAL PERSON, OR A GROUP THEREOF, AND THE IDENTITY
STOLEN IS THAT OF A CORPORATION.

Sec. 169. ACTING AS INTERMEDIARIES FOR GRAFT AND CORRUPT

PRACTICES; PENALTIES. – A CORPORATION CREATED FOR THE
PURPOSE OF COMMITTING, OR AIDING IN THE COMMISSION OF,
GRAFT AND CORRUPT PRACTICES OR IN THE CONCEALMENT
THEREOF SHALL BE PUNISHED BY A FINE RANGING FROM ONE
MILLION (PHP1,000,000.00) TO FIVE MILLION (PHP5,000,000.00)
PESOS AND IMPRISONMENT OF TEN (10) YEARS.
THE CORPORATION’S FAILURE TO SHOW THAT IT HAS INSTALLED
SAFEGUARDS TO ENSURE THAT IT IS CARRYING OUT ITS SERVICES
IN A TRANSPARENT AND LAWFUL MANNER, AND THAT IT HAS
INSTALLED POLICIES, CODES OF ETHICS AND PROCEDURES
AGAINST GRAFT AND CORRUPTION, WHEN COUPLED WITH A
FINDING OF GRAFT AND CORRUPT PRACTICES AGAINST ANY OF
THEIR DIRECTORS, OFFICER, EMPLOYEES, AGENTS, OR
REPRESENTATIVES, SHALL BE PRIMA FACIE EVIDENCE OF
LIABILITY UNDER THIS SECTION.

Sec. 170. ENGAGING INTERMEDIARIES FOR GRAFT AND CORRUPT

PRACTICES; PENALTIES. – A CORPORATION THAT, FOR THE
PURPOSE OF SHIELDING ITSELF FROM LIABILITY FOR GRAFT AND
CORRUPT PRACTICES, ENGAGES THE SERVICES OF AN
INTERMEDIARY WHO COMMITS GRAFT AND CORRUPT PRACTICES
FOR THE CORPORATION’S BENEFIT OR IN ITS INTEREST, SHALL BE
PUNISHED BY A FINE OF ONE MILLION PESOS (PHP1,000,000.00)
AND IMPRISONMENT OF TEN (10) YEARS.
 THE CORPORATION’S FAILURE TO SHOW THAT IT HAS USED THE
HIGHEST DEGREE OF DILIGENCE AND CARE WHEN ACQUIRING THE
SERVICES OF AN INTERMEDIARY, THAT IT HAS SUFFICIENT
KNOWLEDGE AND HAS INSTALLED SAFEGUARDS TO ENSURE THAT
THE INTERMEDIARY IS CARRYING OUT THE CONTRACTED
SERVICES IN A TRANSPARENT AND LAWFUL MANNER, AND THAT IT
HAS INSTALLED POLICIES, CODES OF ETHICS AND PROCEDURES
DESIGNED TO PREVENT GRAFT AND CORRUPTION, WHEN
COUPLED WITH A FINDING OF GRAFT AND CORRUPT PRACTICES
AGAINST THE INTERMEDIARY, SHALL BE PRIMA FACIE EVIDENCE
OF LIABILITY UNDER THIS SECTION.

Sec. 171. TOLERATING GRAFT AND CORRUPT PRACTICES;

PENALTIES. – A DIRECTOR, TRUSTEE, OR OFFICER OF THE
CORPORATION WHO KNOWINGLY ALLOWS OR TOLERATES THE
COMMISSION OF GRAFT AND CORRUPT PRACTICES OR OTHER
FRAUDULENT ACTS BY ITS DIRECTORS, TRUSTEES, OFFICERS, OR
EMPLOYEES, FAILING TO SANCTION THEM, REPORT THEIR
ACTIONS TO THE PROPER AGENCIES, AND/OR FILE THE
APPROPRIATE ACTION AGAINST THEM, SHALL BE PUNISHED BY A
FINE OF ONE MILLION PESOS (PHP1,000,000.00) AND
IMPRISONMENT TEN (10) YEARS.

SEC. 172. RETALIATION AGAINST WHISTLEBLOWERS. –ANY PERSON

WHO, KNOWINGLY AND WITH THE INTENT TO RETALIATE, TAKES
ANY ACTION HARMFUL TO ANOTHER PERSON, INCLUDING BUT NOT
LIMITED TO INTERFERENCE WITH THE LAWFUL EMPLOYMENT OR
LIVELIHOOD OF ANY PERSON, FOR PROVIDING ANY TRUTHFUL
INFORMATION RELATING TO THE COMMISSION OR POSSIBLE
COMMISSION OF ANY OFFENSE OR VIOLATION UNDER THIS CODE,
SHALL BE PUNISHED WITH A FINE RANGING FROM FIVE HUNDRED
THOUSAND PESOS (PHP500,000.00) TO ONE MILLION PESOS
(PHP1,000,000.00) AND/OR IMPRISONMENT OF FIVE (5) TO
TEN (10) YEARS, AT THE DISCRETION OF THE COURT.
Section 144. Violations of the Code. – Violations of any of the provisions of Section 144 173. OTHER Violations of the Code; SEPARATE LIABILITY. - revised the minimum amount of penalty
this Code or its amendments not otherwise specifically penalized therein shall – Violations of any of the provisions of this Code or its amendments not for other violations of the code from Php1k
be punished by a fine of not less than one thousand (P1,000.00) pesos but otherwise specifically penalized therein shall be punished by a fine of not less to Php50k
not more than ten thousand (P10,000.00) pesos or by imprisonment for not than one FIFTY thousand (P1,000.00) (P50,000) pesos but not more than
- revised the maximum amount of penalty
less than thirty (30) days but not more than five (5) years, or both, in the ONE MILLION (P1,000,000) ten thousand (P10,000.00) pesos AND/or
for other violations of the code from
discretion of the court. If the violation is committed by a corporation, the same by imprisonment for OF not less than thirty (30) days but not more than five Php10k to Php1M
may, after notice and hearing, be dissolved in appropriate proceedings before (5) years, or both, in AT the discretion of the court. If the violation is committed
the Securities and Exchange Commission: Provided, That such dissolution by a corporation, the same may, after notice and hearing, be dissolved in
shall not preclude the institution of appropriate action against the director, appropriate proceedings before the Securities and Exchange Commission:
trustee or officer of the corporation responsible for said violation: Provided, Provided, That such dissolution shall not preclude the institution of
further, That nothing in this section shall be construed to repeal the other appropriate action against the director, trustee or officer of the corporation
causes for dissolution of a corporation provided in this Code. responsible for said violation: Provided, further, That nothing in this section
shall be construed to repeal the other causes for dissolution of a corporation
provided in this Code.

LIABILITY FOR ANY OF THE FOREGOING OFFENSES SHALL BE

SEPARATE FROM AND WITHOUT PREJUDICE TO ANY OTHER
ADMINISTRATIVE CIVIL, CRIMINAL LIABILITY UNDER THIS CODE AND
OTHER LAWS.
(A NEW TITLE IS INSERTED IN THE CODE CONTAINING SECTIONS SEC. 174. LIABILITY OF DIRECTORS, TRUSTEES, OFFICERS OR - included provision on the liability of
174 TO 175) OTHER EMPLOYEES. – IF THE OFFENDER IS A CORPORATION THE directors, trustees, officers or other
PENALTY MAY, AT THE DISCRETION OF THE COURT, BE IMPOSED employees
UPON SUCH CORPORATION AND/OR UPON ITS DIRECTORS,
- inlcuded provision on the liability of aiders
TRUSTEES, STOCKHOLDERS, MEMBERS, OFFICERS OR
and abettors and other secondary liability
EMPLOYEES RESPONSIBLE FOR THE VIOLATION OR
INDISPENSABLE TO ITS COMMISSION.

SEC. 175. LIABILITY OF AIDERS AND ABETTORS AND OTHER

SECONDARY LIABILITY. – ANYONE WHO SHALL AID, ABET,
COUNSEL, COMMAND, INDUCE OR PROCURE ANY VIOLATION OF
THIS CODE, OR ANY RULE, REGULATION OR ORDER OF THE
COMMISSION OR WHO SHALL ASSIST THE ACT OR OMISSION OF ANY
PERSON PRIMARILY LIABLE FOR THE VIOLATION, WITH KNOWLEDGE
OR IN RECKLESS DISREGARD THAT SUCH ACT OR OMISSION IS
WRONGFUL SHALL BE PUNISHED WITH A FINE AND/OR
IMPRISONMENT NOT EXCEEDING THAT IMPOSED ON THE PRINCIPAL
OFFENDERS, AT THE DISCRETION OF THE COURT
AFTER TAKING INTO ACCOUNT THEIR PARTICIPATION IN THE
OFFENSE.

Title XVI on Miscellaneous Provisions is renumbered as Title XVII.

Sections 137 and 138 of the Code are renumbered as Sections 176 and 177, respectively.
Section 140. Stock ownership in certain corporations. – Pursuant to the Section 140 179. NATIONALITY AND Stock ownership OF in certain - revised the basis of the determination of
duties specified by Article XIV of the Constitution, the National Economic and corporations. – THE NATIONALITY OF A CORPORATION SHALL BE the nationality of a corporation
Development Authority shall, from time to time, make a determination of DETERMINED BY COMPUTING THE REQUIRED PERCENTAGE OF
- indicated that both the outstanding capital
whether the corporate vehicle has been used by any corporation or by FILIPINO OWNERSHIP BASED ON BOTH (A) THE ENTIRE
stock and the voting stocks be the basis in
business or industry to frustrate the provisions thereof or of applicable laws, OUTSTANDING CAPITAL STOCK, AND (b) THE VOTING STOCKS,
computing the required percentage of
and shall submit to the Batasang Pambansa, whenever deemed necessary, TAKING INTO CONSIDERATION THE FULL BENEFICIAL OWNERSHIP
Filipino ownership
a report of its findings, including recommendations for their prevention or OF THE STOCKS.
correction. - included provision in the determination on
EXCEPT WHEN THE CORPORATION IS REQUIRED BY THE when a corporation shall be deemed a
Maximum limits may be set by the Batasang Pambansa for stockholdings in CONSTITUTION OR BY STATUTE TO BE WHOLLY NATIONALIZED, OR Philippine National
corporations declared by it to be vested with a public interest pursuant to the WHEN THE CORPORATION HAS A CORPORATE STOCKHOLDER
provisions of this section, belonging to individuals or groups of individuals OWNING LESS THAN 60% OF BOTH ITS OUTSTANDING CAPITAL
related to each other by consanguinity or affinity or by close business STOCK AND VOTING STOCKS, THE CONTROL TEST SHALL BE
interests, or whenever it is necessary to achieve national objectives, prevent APPLIED WHEN DETERMINING ITS NATIONALITY.
illegal monopolies or combinations in restraint or trade, or to implement
national economic policies declared in laws, rules and regulations designed EXCEPT WHEN A MORE STRINGENT MEASURE IS REQUIRED IN THE
to promote the general welfare and foster economic development. CONSTITUTION OR OTHER LAWS, A CORPORATION SHALL BE 5
DEEMED A PHILIPPINE NATIONAL WHEN:
In recommending to the Batasang Pambansa corporations, businesses or
industries to be declared vested with a public interest and in formulating (A) IT IS ORGANIZED UNDER THE LAWS OF THE PHILIPPINES AND
proposals for limitations on stock ownership, the National Economic and AT LEAST SIXTY PERCENT (60%) OF THE CAPITAL STOCK
Development Authority shall consider the type and nature of the industry, the OUTSTANDING AND ENTITLED TO VOTE IS OWNED AND HELD BY
size of the enterprise, the economies of scale, the geographic location, the CITIZENS OF THE PHILIPPINES, PROVIDED, THAT WHERE A
extent of Filipino ownership, the labor intensity of the activity, the export CORPORATION AND ITS NON-FILIPINO STOCKHOLDERS OWN
potential, as well as other factors which are germane to the realization and STOCKS IN ANOTHER CORPORATION, AT LEAST SIXTY PERCENT
promotion of business and industry. (60%) OF THE CAPITAL STOCKS OUTSTANDING AND ENTITLED TO
VOTE OF BOTH CORPORATIONS MUST BE OWNED AND HELD BY
CITIZENS OF THE PHILIPPINES AND AT LEAST SIXTY PERCENT
(60%) OF THE MEMBERS OF THE BOARD OF DIRECTORS OF BOTH
CORPORATIONS MUST BE CITIZENS OF THE PHILIPPINES; OR
(B) ALTHOUGH ORGANIZED ABROAD, IT IS REGISTERED AS DOING
BUSINESS IN THE PHILIPPINES UNDER THIS CODE AND ONE
HUNDRED PERCENT (100%) OF THE CAPITAL STOCK OUTSTANDING
AND ENTITLED TO VOTE IS WHOLLY OWNED BY FILIPINOS.

Pursuant to the duties specified by Article XIV of the Constitution, the THE
National Economic and Development Authority shall, from time to time, UPON
FINDING OR RECOMMENDATION FROM THE COMMISSION OR
FROM OTHER APPROPRIATE GOVERNMENT AGENCIES, make a
 determination of whether the corporate vehicle has been used by any
corporation or by business or industry to frustrate the provisions thereof or of
applicable laws, and shall submit to the Batasang Pambansa CONGRESS,
whenever deemed necessary, a report of its findings, including
recommendations for their prevention or correction.

Maximum limits may be set by the Batasang Pambansa CONGRESS for

stockholdings in corporations declared by it to be vested with a public interest
pursuant to the provisions of this section, belonging to individuals or groups
of individuals related to each other by consanguinity or affinity or by close
business interests, or whenever it is necessary to achieve national objectives,
prevent illegal monopolies or combinations in restraint or trade, or to
implement national economic policies declared in laws, rules and regulations
designed to promote the general welfare and foster economic development.

In recommending to the Batasang Pambansa CONGRESS corporations,

businesses or industries to be declared vested with a public interest and in
formulating proposals for limitations on stock ownership, the National
Economic and Development Authority shall consider the type and nature of
the industry, the size of the enterprise, the economies of scale, the
geographic location, the extent of Filipino ownership, the labor intensity of
the activity, the export potential, as well as other factors which are germane
to the realization and promotion of business and industry.

Section 141. Annual report of corporations. – Every corporation, domestic or Section 141 180. Annual report REPORTORIAL REQUIREMENTS of - specified all the reportorial requirements
foreign, lawfully doing business in the Philippines shall submit to the corporations. – EXCEPT AS OTHERWISE PROVIDED IN THIS CODE, of corporations in addition to the annual
Securities and Exchange Commission an annual report of its operations, every corporation, domestic or foreign, lawfully doing business in the report
together with a financial statement of its assets and liabilities, certified by any Philippines shall submit to the Securities and Exchange Commission, IN THE
- included a provision as to the
independent certified public accountant in appropriate cases, covering the FORM AND SUBSTANCE PRESCRIBED BY IT:
consequence should the corporation fails to
preceding fiscal year and such other requirements as the Securities and
submit any of the reportorial requirements
Exchange Commission may require. Such report shall be submitted within an annual report of its operations, together with a financial statement of its
three times within a period of five years
such period as may be prescribed by the Securities and Exchange assets and liabilities, certified by any independent certified public
regardless whether such is intermittently or
Commission. accountant in appropriate cases, covering the preceding fiscal year and such
consecutively
other requirements as the Securities and Exchange Commission may
require.

1. ANNUAL FINANCIAL STATEMENTS DULY AUDITED BY THE

CORPORATION’S INTERNAL AUDITOR AND BY AN INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANT WHO IS ACCREDITED BY THE
BOARD OF ACCOUNTANCY AND WHO POSSESSES SUCH OTHER
ACCREDITATION AS THE COMMISSION MAY REQUIRE;

2. A GENERAL INFORMATION SHEET;

3. A DIRECTOR OR TRUSTEE COMPENSATION REPORT WHICH

SHALL CONTAIN, AMONG OTHERS, THE FOLLOWING:

a. THE CORPORATION’S POLICY ON DIRECTOR OR TRUSTEE

REMUNERATION, INCLUDING THE FRAMEWORK FOR DETERMINING
THE REMUNERATION LEVELS FOR INDIVIDUAL DIRECTORS OR
TRUSTEES;

b. A CLEAR, CONCISE AND EASILY UNDERSTANDABLE STATEMENT

OF ALL FIXED AND VARIABLE COMPENSATION PAID AND ALL
INCENTIVES, AWARDS, AND/OR OPTIONS GIVEN, DIRECTLY OR
INDIRECTLY, TO DIRECTORS OR TRUSTEES DURING THE
PRECEDING FISCAL YEAR; AND

c. A STATEMENT OF OTHER FORMS OF REMUNERATION AND/OR

COMPENSATION ARRANGEMENTS NOT COVERED UNDER THE
PRECEDING SUB-PARAGRAPHS;

4. A DIRECTOR OR TRUSTEE APPRAISAL OR PERFORMANCE

REPORT AND THE STANDARDS OR CRITERIA USED TO ASSESS
EACH DIRECTOR OR TRUSTEE;

5. A DIRECTOR OR TRUSTEE ATTENDANCE REPORT, INDICATING

THE ATTENDANCE OF EACH DIRECTOR OR TRUSTEE AT EACH OF
THE MEETINGS OF THE BOARD AND ITS COMMITTEES; 9

6. A STATEMENT OF ALL EXTERNAL AUDIT AND NON-AUDIT FEES;

7. SUCH OTHER REPORTS THAT THE COMMISSION MAY REQUIRE
BY RULE.

THE FOREGOING REPORTORIAL REQUIREMENTS SHALL BE

ACCOMPANIED BY A CERTIFICATION FROM THE CHAIRMAN OF THE
BOARD, THE PRESIDENT, THE TREASURER AND THE CORPORATE
SECRETARY (OR THEIR EQUIVALENT) TO WIT:

1. AS TO THE ANNUAL FINANCIAL STATEMENTS, THAT THE

INFORMATION CONTAINED THEREIN IS COMPLETE, FAIRLY AND
ACCURATELY PRESENTS, IN ALL MATERIAL RESPECTS, THE
FINANCIAL CONDITION OF THE CORPORATION AND DOES NOT
CONTAIN ANY FALSE OR MISLEADING STATEMENT OR
MISREPRESENTATION;

2. AS TO THE GENERAL INFORMATION SHEET, THAT THE

INFORMATION CONTAINED THEREIN IS COMPLETE, ACCURATE AND
DOES NOT CONTAIN ANY FALSE OR MISLEADING STATEMENT OR
MISREPRESENTATION; AND

3. AS TO THE DIRECTOR OR TRUSTEE COMPENSATION REPORT,

THAT THE INFORMATION CONTAINED THEREIN IS COMPLETE,
FAIRLY AND ACCURATELY PRESENTS, IN ALL MATERIAL
RESPECTS, THE CORPORATION’S POLICY ON DIRECTOR OR
TRUSTEE REMUNERATION, THE ACTUAL REMUNERATIONS OF
SUCH DIRECTORS OR TRUSTEES, AND DOES NOT CONTAIN ANY
FALSE OR MISLEADING STATEMENT OR MISREPRESENTATION.

Such report REPORTORIAL REQUIREMENTS shall be submitted

ANNUALLY AND within such period as may be prescribed by the Securities
and Exchange Commission.

IF A CORPORATION FAILS TO SUBMIT ANY OF THE FOREGOING

REPORTORIAL REQUIREMENTS THREE TIMES, WHETHER
INTERMITTENTLY OR CONSECUTIVELY, WITHIN A PERIOD OF FIVE
 YEARS, THE COMMISSION MAY, AFTER DUE NOTICE AND HEARING,
PUT THE CORPORATION ON DELINQUENCY STATUS OR REVOKE ITS
CERTIFICATE OF INCORPORATION IN ACCORDANCE WITH SECTION
22.
Section 142. Confidential nature of examination results. – All interrogatories Section 142 181. VISITORIAL POWER AND Confidential nature of - included a provision regarding visitorial
propounded by the Securities and Exchange Commission and the answers examination results. – THE COMMISSION SHALL EXERCISE VISITORIAL power of the commission
thereto, as well as the results of any examination made by the Commission POWERS OVER ALL CORPORATIONS REGISTERED WITH IT. THESE
or by any other official authorized by law to make an examination of the VISITORIAL POWERS SHALL INCLUDE, BUT NOT BE LIMITED TO
operations, books and records of any corporation, shall be kept strictly EXAMINATION, INVESTIGATION, INSPECTION OF RECORDS
confidential, except insofar as the law may require the same to be made REGARDLESS OF THE FORM IN WHICH THE INFORMATION IS
public or where such interrogatories, answers or results are necessary to be CONTAINED, REGULATION AND SUPERVISION OF ACTIVITIES,
presented as evidence before any court. ENFORCING COMPLIANCE AND IMPOSING SANCTIONS IN
ACCORDANCE WITH THIS CODE.

ANY UNJUSTIFIED REFUSAL OR OBSTRUCTION BY A CORPORATION,

OR ANYONE UNDER ITS EMPLOY, IN THE COMMISSION’S EXERCISE
OF THE FOREGOING AUTHORITY SHALL, IN ADDITION TO THE
IMPOSITION OF PENALTIES AND SANCTIONS UNDER THIS CODE,
CONSTITUTE A JUSTIFIABLE GROUND FOR THE REVOCATION OF ITS
CERTIFICATE OF INCORPORATION.

All interrogatories propounded by the Securities and Exchange Commission

and the answers thereto, as well as the results of any examination made by
the Commission or by any other official authorized by law to make an
examination of the operations, books and records of any corporation, shall be
kept strictly confidential, except insofar as the law may require the same to
be made public, WHEN NECESSARY FOR THE COMMISSSION TO TAKE
ACTION OR ISSUE ORDERS IN THE EXERCISE OF ITS POWERS
UNDER THIS CODE, or where such interrogatories, answers or results are
necessary to be presented as evidence before any court.
Section 143. Rule-making power of the Securities and Exchange Section 143 182. Rule-making power POWERS AND FUNCTIONS of the - included a detailed provision regarding
Commission. – The Securities and Exchange Commission shall have the Securities and Exchange Commission AND JURISDICTION OVER the functions and powers of the SEC
power and authority to implement the provisions of this Code, and to ACTIONS. – CONSISTENT WITH AND IN ADDITION TO THE POWERS
promulgate rules and regulations reasonably necessary to enable it to AND FUNCTIONS PROVIDED IN PRESIDENTIAL DECREE NO. 902-A,
perform its duties hereunder, particularly in the prevention of fraud and THE SECURITIES REGULATION CODE, THE INVESTMENT HOUSES
abuses on the part of the controlling stockholders, members, directors, LAW, THE FINANCING COMPANY ACT AND OTHER LAWS, – The
trustees or officers. Securities and Exchange Commission shall have the power and authority,
AMONG OTHERS, THE FOLLOWING POWERS AND FUNCTIONS:

1. HAVE JURISDICTION AND SUPERVISION OVER ALL

CORPORATIONS, REGISTERED WITH IT, EXCEPT AS OTHERWISE
PROVIDED UNDER THIS CODE;

2. FORMULATE POLICIES AND RECOMMENDATIONS ON ISSUES

PERTAINING TO THE REGULATION AND SUPERVISION OF
CORPORATIONS, AND PROPOSE LEGISLATION AND AMENDMENTS
THERETO;

3. APPROVE OR REJECT APPLICATIONS, ISSUE OR REVOKE OTHER

CERTIFICATIONS, REQUIRE ADDITIONAL SUBMISSIONS OR
AMENDMENTS THERETO;

4. REGULATE, INVESTIGATE, SUPERVISE THE ACTIVITIES OF

PERSONS TO ENSURE COMPLIANCE WITH THIS CODE;

5. IMPOSE SANCTIONS FOR THE VIOLATIONS OF THIS CODE AND

ITS RULES, REGULATIONS AND ORDERS OF THE COMMISSION
ISSUED PURSUANT THERETO;

6. PROMOTE CORPORATE GOVERNANCE AND, IN FURTHERANCE

THEREOF, EXPAND OR ADD TO THE REQUIREMENTS WITH
RESPECT TO, AMONG OTHERS, THE
CONTENTS OF THE BY-LAWS, THE QUALIFICATIONS AND
DISQUALIFICATIONS OF DIRECTORS, AND THE RECORDS THAT
MUST BE ON HAND AT THE CORPORATION’S ADDRESS OF RECORD
AND THE ANNUAL REPORTS THAT MUST BE SUBMITTED TO THE
COMMISSION;

7. PREPARE, APPROVE, AMEND OR REPEAL RULES, REGULATIONS

AND ORDERS, AND ISSUE OPINIONS AND PROVIDE GUIDANCE ON
AND SUPERVISE COMPLIANCE WITH SUCH RULES, REGULATIONS
AND ORDERS

8. to implement the provisions of this Code, and to promulgate rules and

regulations reasonably necessary to enable it to perform its duties
hereunder, particularly in the prevention of fraud and abuses on the part of
the controlling stockholders, members, directors, trustees or officers.
ISSUE CEASE AND DESIST ORDERS WITHOUT THE NECESSITY OF A
HEARING, TO PREVENT FRAUD OR INJURY TO THE PUBLIC[.];

9. PUNISH FOR CONTEMPT OF THE COMMISSION, BOTH DIRECT AND

INDIRECT;

10. COMPEL THE OFFICERS OF ANY REGISTERED CORPORATION

TO CALL MEETINGS OF STOCKHOLDERS OR MEMBERS UNDER ITS
SUPERVISION AND TO ISSUE SUCH ORDERS AS MAY BE
APPROPRIATE, INCLUDING, WITHOUT LIMITATION, ORDERS
DESIGNATING THE TIME AND PLACE OF THE ELECTION, THE
RECORD DATE OR DATES FOR DETERMINATION OF
STOCKHOLDERS ENTITLED TO NOTICE OF THE ELECTION AND TO
VOTE THEREAT, AND THE FORM OF NOTICE OF SUCH ELECTION;

11. ISSUE SUBPOENA DUCES TECUM AND SUMMON WITNESSES TO

APPEAR IN PROCEEDINGS BEFORE THE COMMISSION AND IN
APPROPRIATE CASES ORDER THE EXAMINATION, SEARCH AND
SEIZURE OF ALL DOCUMENTS, PAPERS, FILES AND RECORDS, TAX
RETURNS, AND BOOKS OF ACCOUNTS OF ANY ENTITY OR PERSON
UNDER INVESTIGATION AS MAY BE NECESSARY FOR THE PROPER
DISPOSITION OF THE CASES BEFORE IT, SUBJECT TO THE
PROVISIONS OF EXISTING LAWS;

12. SUSPEND OR REVOKE, AFTER PROPER NOTICE AND HEARING,

THE CERTIFICATE OF INCORPORATION OF CORPORATIONS UPON
ANY OF THE GROUNDS PROVIDED UNDER THIS CODE OR WHEN
DIRECTED BY FINAL JUDGMENT OF A COURT OF COMPETENT
JURISDICTION;

13. DISSOLVE OR OTHERWISE SANCTION CORPORATIONS

CREATED FOR, COMMITTING, AIDING IN THE COMMISSION OF, OR IN
ANY MANNER FURTHERING SECURITIES VIOLATIONS, SMUGGLING,
TAX EVASION, MONEY LAUNDERING, GRAFT AND CORRUPT
 PRACTICES OR OTHER FRAUDULENT OR ILLEGAL ACTS;

14. ISSUE WRITS OF EXECUTION AND OF ATTACHMENT TO

ENFORCE PAYMENT OF THE FEES, ADMINISTRATIVE FINES AND
OTHER DUES COLLECTIBLE UNDER THIS CODE;

15. EXERCISE SUCH OTHER POWERS AS MAY BE PROVIDED BY

LAW AS WELL AS THOSE WHICH MAY BE IMPLIED FROM, OR WHICH
ARE NECESSARY OR INCIDENTAL TO CARRYING OUT THE
EXPRESS POWERS GRANTED TO THE COMMISSION TO ACHIEVE
THE OBJECTIVES AND PURPOSES OF THIS CODE AND SUCH OTHER
LAWS.

NO COURT BELOW THE COURT OF APPEALS SHALL HAVE

JURISDICTION TO ISSUE ANY RESTRAINING ORDER, PRELIMINARY
INJUNCTION OR PRELIMINARY MANDATORY INJUNCTION IN ANY
CASE, DISPUTE OR CONTROVERSY THAT, DIRECTLY OR
INDIRECTLY, INTERFERES WITH THE PERFORMANCE BY THE
COMMISSION OF ITS DUTIES AND RESPONSIBILITIES UNDER THIS
CODE.
(NEW PROVISIONS INSERTED IN THE CODE) SUCCEEDING SECTION 184. DEVELOPMENT OF OTHER SYSTEMS. – THE - included additional section regarding the
PROVISIONS ARE RE-NUMBERED ACCORDINGLY COMMISSION SHALL, CONSIDERING ADVANCES IN TECHNOLOGY, development of other systems in relation to
DEVELOP SUCH SYSTEMS AS IT MAY DEEM NECESSARY TO the effective implementation and
FACILITATE AND EXPEDITE, AMONG OTHERS, CORPORATE NAME enforcement of the provision of the code
RESERVATION AND REGISTRATION, INCORPORATION, AND THE
- included additional section for the
SUBMISSION OFREPORTS, NOTICES, DOCUMENTS AND OTHER
guidelines on the inclusion of arbitration
PAPERS REQUIRED UNDER THIS CODE, AND PRESCRIBE THE
arrangement
CORRESPONDING RULES AND REGULATIONS THEREFOR. THE
COMMISSION SHALL HAVE FULL DISCRETION TO DETERMINE WHICH
SYSTEM OR SYSTEMS ALLOW THE MOST EFFECTIVE
IMPLEMENTATION AND ENFORCEMENT OF THE PROVISIONS OF THIS
CODE

SEC. 185. ARBITRATION. – WHEN THE ARTICLES OF INCORPORATION

OR BY-LAWS OF A DOMESTIC UNLISTED CORPORATION SO
PROVIDE, ANY OR ALL DISPUTES BETWEEN OR AMONG THE
CORPORATION, ITS STOCKHOLDERS OR MEMBERS,
AND DIRECTORS ARISING OUT OF THE IMPLEMENTATION OF THEIR
ARTICLES OF INCORPORATION OR BY-LAWS, AS WELL AS OTHER
CONTROVERSIES ARISING OUT OF THEIR INTRACORPORATE
RELATIONS, INCLUDING BUT NOT LIMITED TO CONTROVERSIES IN
THE ELECTION OR APPOINTMENT OF THE CORPORATION’S
DIRECTORS, TRUSTEES, OFFICERS OR MANAGERS, SHALL BE
REFERRED TO ARBITRATION. HOWEVER, A DISPUTE SHALL NOT BE
SUBMITTED TO ARBITRATION WHEN SUCH WILL LIMIT OR PRECLUDE
ANY RIGHT, ACTION OR DETERMINATION BY THE COMMISSION THAT
IT WOULD OTHERWISE BE AUTHORIZED TO ADOPT, ADMINISTER OR
ENFORCE UNDER THIS CODE AND EXISTING LAWS. SUCH DISPUTE
SHALL BE DEEMED EXCLUDED FROM THE AGREEMENT TO
ARBITRATE, WHICH SHALL OTHERWISE REMAIN VALID AND
BINDING.

THE ARBITRATION AGREEMENT SHALL BE BINDING AGAINST THE

CORPORATION’S DIRECTORS, TRUSTEES, OFFICERS OR
MANAGERS, UPON ACCEPTANCE OF THEIR POST.

TO BE VALID, THE AGREEMENT TO ARBITRATE IN THE ARTICLES OF

INCORPORATION OR THE BY-LAWS SHOULD INDICATE THE
NUMBER AND PROCEDURE FOR THE APPOINTMENT OF
ARBITRATORS AND GRANT TO A DESIGNATED THIRD,
INDEPENDENT, AND EXTERNAL PARTY OR BODY THE POWER TO
APPOINT THE ARBITRATORS. IF THE THIRD PARTY OR BODY FAILS
TO APPOINT THE ARBITRATORS IN THE MANNER AND WITHIN THE
PERIOD SPECIFIED IN THE AGREEMENT TO ARBITRATE, EACH
PARTY TO THE ARBITRATION MAY REQUEST THAT THE
APPOINTMENT OF THE ARBITRATORS BE MADE BY THE
COMMISSION. ARBITRATORS SHALL BE THOSE WHO ARE
EITHERDULY ACCREDITED BY THE COMMISSION OR MEMBERS OF
ORGANIZATIONS DULY-ACCREDITED BY THE COMMISSION.

THE ARBITRAL TRIBUNAL SHALL HAVE FULL AUTHORITY TO

RESOLVE ALL ISSUES RELATING TO ITS JURISDICTION AND/OR THE
VALIDITY OR EFFECTIVITY OF THE ARBITRATION AGREEMENT. A
REGIONAL TRIAL COURT BEFORE WHICH AN INTRACORPORATE
DISPUTE IS FILED SHALL, BEFORE THE TERMINATION OF THE
PRETRIAL CONFERENCE, DISMISS THE CASE UPON DETERMINING
THE EXISTENCE OF AN AGREEMENT TO ARBITRATE IN THE
ARTICLES OF INCORPORATION OR BY-LAWS OF THE
CORPORATION, ANY AMENDMENT THEREOF, OR IN A SEPARATE
AGREEMENT.

THE ARBITRAL TRIBUNAL SHALL HAVE THE POWER TO GRANT

INTERIM MEASURES NECESSARY TO ENSURE ENFORCEMENT OF
THE AWARD, TO PREVENT A MISCARRIAGE OF JUSTICE, OR TO
OTHERWISE PROTECT THE RIGHTS OF THE PARTIES.

A FINAL ARBITRAL AWARD UNDER THIS SECTION SHALL BE

EXECUTORY UPON THE LAPSE OF FIFTEEN (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.

THE COMMISSION SHALL FORMULATE THE RULES AND

REGULATIONS WHICH SHALL GOVERN ARBITRATION UNDER THIS
SECTION.

SEC. 186. JURISDICTION OVER CORPORATIONS OF SPECIAL

CHARACTER. – THE POWERS, AUTHORITIES AND
RESPONSIBILITIES THAT ARE VESTED IN THE COMMISSION UNDER
THIS CODE AND PRESIDENTIAL DECREE 902-A INVOLVING
CORPORATIONS OF A SPECIAL CHARACTER ARE TRANSFERRED
TO THE COMMISSION ON ELECTIONS (COMELEC) WITH RESPECT TO
PARTY-LIST ORGANIZATIONS, TO THE HOUSING AND LAND USE
REGULATORY BOARD (HLURB) WITH RESPECT TO NEIGHBORHOOD
ASSOCIATIONS AND HOMEOWNERS’ ASSOCIATIONS, AND TO THE
DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS
(DOTC) WITH RESPECT TOTHE ASSOCIATIONS OF OPERATORS AND
DRIVERS OF PUBLIC TRANSPORT.

THE MONITORING, SUPERVISION AND REGULATION OF

CORPORATIONS OF SUCH CHARACTER ABOVE-DESCRIBED
PREVIOUSLY REGISTERED WITH THE COMMISSION SHALL
LIKEWISE BE TRANSFERRED TO THE SAID PERTINENT
GOVERNMENT AGENCIES, RESPECTIVELY.

FOR THIS PURPOSE, THE COMELEC, HLURB, AND DOTC, IN

COORDINATION WITH THE COMMISSION, SHALL PROMULGATE THE
CORRESPONDING IMPLEMENTING RULES AND/OR ENTER INTO
 INTER-AGENCY AGREEMENTS.
NEW SECTION INSERTED IN THE CODE SECTION 187. IMPLEMENTING RULES AND REGULATIONS. – THE
COMMISSION SHALL PROMULGATE AND/OR AMEND THE
NECESSARY RULES AND REGULATIONS FOR THE EFFECTIVE
IMPLEMENTATION OF THIS ACT.
Section 145. Amendment or repeal. – No right or remedy in favor of or against Deleted the provision
any corporation, its stockholders, members, directors, trustees, or officers,
nor any liability incurred by any such corporation, stockholders, members,
directors, trustees, or officers, shall be removed or impaired
either by the subsequent dissolution of said corporation or by any subsequent
amendment or repeal of this Code or of any part thereof.
Section 146. Repealing clause. – Except as expressly provided by this Code, Section 146 189. Repealing clause. – Except as expressly provided by this
all laws or parts thereof inconsistent with any provision of this Code shall be Code, all ANY law,s or parts thereof PRESIDENTIAL DECREE OR
deemed repealed. ISSUANCE, EXECUTIVE ORDER, LETTER OF INSTRUCTION,
ADMINISTRATIVE ORDER, RULE OR REGULATION CONTRARY TO OR
inconsistent with any provision of this ACT IS HEREBY Code shall be
deemed repealed OR MODIFIED ACCORDINGLY.
Section 147. Separability of provisions. – Should any provision of this Code Section 147 188. Separability of provisions CLAUSE. – Should IF any
or any part thereof be declared invalid or unconstitutional, the other provision of this ACT Code or any part thereof be IS declared invalid or
provisions, so far as they are separable, shall remain in force. unconstitutional, the other provisions HEREOF WHICH , so far as they are
NOT AFFECTED THEREBY separable, shall CONTINUE TO BE remain in
FULL force AND EFFECT.
Section 148. Applicability to existing corporations. – All corporations lawfully Deleted the provision
existing and doing business in the Philippines on the date of the effectivity of
this Code and heretofore authorized, licensed or registered by the Securities
and Exchange Commission, shall be deemed to have been authorized,
licensed or registed under the provisions of this Code, subject to the terms
and conditions of its license, and shal be governed by the provisions hereof:
Provided, That if any such corporation is affected by the new requirements of
this Code, said corporation shall, unless otherwise
herein provided, be given a period of not more than two (2) years from the
effectivity of this Code within which to comply with the same.
Section 149. Effectivity. – This Code shall take effect immediately upon its Section 149 190. Effectivity CLAUSE. – This ACT Code shall take effect
approval. FIFTEEN (15) DAYS AFTER ITS PUBLICATION IN THE OFFICIAL
GAZETTE OR IN AT LEAST TWO (2) NEWSPAPERS OF GENERAL
CIRCULATION, WHICHEVER DATE COMES EARLIER immediately upon
its approval.