Article 36p. 36

COMMERCIAL LAWS NEGOTIABLE INSTRUMENTS, CORPORATION, INSURANCE, TRANSPORTATION, BANKING

Foreign

banking,

financial

and

insurance

corporations shall, in addition to the above requirements,

comply with the provisions of existing laws applicable to

them. In the case of all other foreign corporations, no

application

for

license

to

transact

business

in

the

Philippines

shall be accepted by the Securities and

Exchange Commission without previous authority from

the appropriate government agency, whenever required

by law. (68a)

SECTION 126. Issuance of a License . — Where the

Securities and Exchange Commission is satisfied that the

applicant has complied with all the requirements of this

Code and other special laws, rules and regulations, the

Commission shall issue a license to the applicant to

transact business in the Philippines for the purpose or

purposes specified in such license. Upon issuance of the

license, such foreign corporation may commence to

transact its business in the Philippines and continue to do

so for as long as it retains its authority to act as a

corporation under the laws of the country or state of its

incorporation, unless such license is sooner surrendered,

revoked, 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 the Philippines, the licensee,

except a foreign banking or insurance corporation, shall

deposit with the Securities and Exchange Commission for

the benefit of present and future creditors of the licensee

in the Philippines, securities satisfactory to the Securities

and Exchange Commission, consisting of bonds or other

evidence of indebtedness of the Government of the

Philippines,

its

political

subdivisions

and

instrumentalities, or of government-owned or controlled

corporations and entities, shares of stock in "registered

enterprises" as this term is defined in Republic Act No.

5186 , shares of stock in domestic corporations registered

in the stock exchange, or shares of stock in domestic

insurance companies and banks, or any combination of

these kinds of securities, in the actual market value of at

least

one

hundred

thousand

(P100,000.00)

pesos;

Provided , however , That within six (6) months after each

fiscal year of the licensee, the Securities and Exchange

Commission

shall

require

the

licensee

to

deposit

additional securities equivalent in actual market value to

two (2%) percent of the amount by which the licensee's

gross income for that fiscal year exceeds five million

(P5,000,000.00)

pesos.

The

Securities

and

Exchange

Commission

shall

also

require

deposit

of

additional

securities if the actual market value of the securities on

deposit has decreased by at least ten (10%) percent of

their

actual

market

value

at

the

time

they

were

deposited. The Securities and Exchange Commission may

at its discretion release part of the additional securities

deposited with it if the gross income of the licensee has

decreased, or if the actual market value of the total

securities on deposit has increased, by more than ten

(10%) percent of the actual market value of the securities

at the time they were deposited. The Securities and

Exchange Commission may, from time to time, allow the

licensee to substitute other securities for those already on

deposit as long as the licensee is solvent. Such licensee

shall be entitled to collect the interest or dividends on the

securities deposited. In the event the licensee ceases to

do business in the Philippines, the securities deposited as

aforesaid shall be returned, upon the licensee's making

application therefor and proving 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. (n)

SECTION 127. Who May Be a Resident Agent . — A

resident agent may be either an individual residing in the

Philippines or a domestic corporation lawfully transacting

business in the Philippines: Provided , That in the case of

an individual, he must be of good moral character and of

sound financial standing. (n)

SECTION 128. Resident Agent ; Service of Process . —

The Securities and Exchange Commission shall require as

a condition precedent to the issuance of the license to

transact

business

in

the

Philippines by any foreign

corporation that such corporation file with the Securities

and Exchange Commission a written power of attorney

designating some person who must be a resident of the

Philippines, on whom any summons and other legal

processes may be served in all actions or other legal

proceedings against such corporation, and consenting

that service upon such resident agent shall be admitted

and held as valid as if served upon the duly authorized

officers of the foreign corporation at its home office. Any

such foreign corporation shall likewise execute and file

with

the

Securities

and

Exchange

Commission

an

agreement

or

stipulation,

executed

by

the

proper

authorities of said corporation, in form and substance as

follows:

"The

(name

of

foreign

corporation) does hereby

stipulate and agree, in consideration of its being granted

by the Securities and Exchange Commission a license to

transact business in the Philippines, that if at any time

said corporation shall cease to transact business in the

Philippines, or shall be without any resident agent in the

Philippines

on

whom

any

summons

or other legal

processes

may

be

served,

then

in

any

action

or

proceeding arising out of any business or transaction

which

occurred

in

the

Philippines,

service

of

any

summons or other legal process may be made upon the

Securities and Exchange Commission and that such

service shall have the same force and effect as if made

upon the duly-authorized officers of the corporation at its

home office."

Whenever such service of summons or other process

shall

be

made

upon

the

Securities

and

Exchange

Commission, it must, within ten (10) days thereafter,

transmit by mail a copy of such summons or other legal

process to the corporation at its home or principal office.

The sending of such copy by the Commission shall be a

necessary part of and shall complete such service. All

expenses incurred by the Commission for such service

shall be paid in advance by the party at whose instance

the service is made.

In case of a change of address of the resident agent, it

shall be his or its duty to immediately notify in writing the

Securities and Exchange Commission of the new address.

(72a; and n)

SECTION

129.

Law

Applicable .

—

Any

foreign

corporation lawfully doing business in the Philippines

shall

be

bound

by

all

laws,

rules

and

regulations

applicable to domestic corporations of the same class,

save and except such only as provide for the creation,

formation, organization or dissolution of corporations or

such as fix the relations, liabilities, responsibilities, or

duties

of

stockholders,

members,

or

officers

of

corporations to each other or to the corporation. (73a)

SECTION

130.

Amendments

to

Articles

of

Incorporation or bylaws of Foreign Corporations . —

Whenever the articles of incorporation or the bylaws of a

foreign corporation authorized to transact business in the

Philippines are amended, such foreign corporation shall,

within sixty (60) days after such amendment becomes

effective,

file

with

the

Securities

and

Exchange

Commission,

and

in

the

proper

cases

with

the

appropriate government agency, a duly authenticated

copy

of

the

articles

of

incorporation

or

bylaws,

as

amended,

indicating

clearly

in

capital

letters

or

by

underscoring the change or changes made, duly certified

by the authorized official or officials of the country or

state of incorporation. The filing thereof shall not of itself

enlarge or alter the purpose or purposes for which such

corporation is authorized to transact business in the

Philippines. (n)

SECTION

131.

Amended

License .

—

A

foreign

corporation

authorized

to

transact

business

in

the

Philippines shall obtain an amended license in the event

it changes its corporate name, or desires to pursue in the

Philippines other or additional purposes, by submitting

an application therefor to the Securities and Exchange

© Compiled by RGL

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