After reading “What is the Power of the Corporation to Extend or Shorten Corporate Term?”, read also “What are the duties of a Personal Information Controller under R.A. No. 10173?“
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In case of extension of corporate term, a dissenting stockholder may exercise the right of appraisal.
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No extension may be made earlier than three (3) years prior to the original or subsequent expiry dates.
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A corporation whose term has expired may, at any time, apply for a revival of its corporate existence.
A corporate term for a specific period may be extended or shortened by amending the articles of incorporation. (Section 11, Revised Corporation Code of the Philippines)
The law says:
A private corporation may extend or shorten its terms as stated in the articles of incorporation when approved by a majority vote of the board of directors or trustees; and ratified at a meeting by the stockholders or members representing at least 2/3 of the outstanding capital stock or of its members. (Section 36, RCCP)
There should be a written notice of stockholders/members meeting stating:
- Proposed action and time and place of meeting;
- Addressed to each stockholder/member, and
- Deposited to the addressee in the post office, with postage prepaid or served personally
However, when allowed in the by-laws or done with the consent of the stockholder, the written notice shall be sent electronically in accordance with the rules and regulations of the SEC on the use of electronic data messages.
In case of extension, what right may a dissenting stockholder exercise?
The law says:
In case of extension of corporate term, a dissenting stockholder may exercise the right of appraisal which is the right of any stockholder of a corporation to dissent and demand payment of the fair value of his or her shares in the corporation. (Section 36, RCCP)
When may a corporation extend its corporate term?
The law says:
No extension may be made earlier than three (3) years prior to the original or subsequent expiry dates unless there are justifiable reasons for an earlier extension as may be determined by the Commission. (Section 11, RCCP)
A corporation whose term has expired may, at any time, apply for a revival of its corporate existence, together with all the rights and privileges under its certificate of incorporation and subject to all of its duties, debts, and liabilities existing prior to revival. Upon approval by the Commission, the corporation shall be deemed revived, and a certificate of revival or corporate existence shall be issued, giving it perpetual existence, unless its application for revival provides
otherwise. (Section 11, RCCP)
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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