FOREIGN

CORPORATION
TITLE XV
 SEC 140
Definition and Rights of Foreign Corporations.
For purposes of this Code, a foreign corporation
is one formed, organized or existing under laws
other than those of the Philippines’ and whose
laws allow Filipino citizens and corporations to
do business in its own country or State.
 Application to Existing Foreign Corporations.
Every foreign corporation which, on the
date of the effectivity of this Code, is
SEC 141 authorized to do business in the Philippines
under a license issued to it shall continue to
have such authority under the terms and
conditions of its license, subject to the
provisions of this Code and other special
laws.
Application for a License.
A foreign corporation applying for a license to transact business in
the Philippines shall submit to the Commission a copy of its articles
of incorporation and bylaws, certified in accordance with law, and
their translation to an official language of the Philippines, if
necessary. The application shall be under oath and, unless already
stated in its articles of incorporation, shall specifically set forth the
following:

(a) The date and term of incorporation;

SEC 142
(b) The address, including the street number, of the principal office of
the corporation in the country or State of incorporation;

(c) The name and address of its resident agent authorized to accept
summons and process in all legal proceedings and all notices affecting
the corporation, pending the establishment of a local office;
(d) The place in the Philippines where the corporation intends to operate;
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(e) The specific purpose or purposes which the corporation intends to pursue
in the transaction of its business in the Philippines: Provided, That said
purpose or purposes are those specifically stated in the certificate of authority
issued by the appropriate government agency;

(f) The names and addresses of the present directors and officers of the
corporation;

(g) A statement of its authorized capital stock and the aggregate number of
shares which the corporation has authority to issue, itemized by class, par
value of shares, shares without par value, and series, if any;

(h) A statement of its outstanding capital stock and the aggregate number of
shares which the corporation has issued, itemized by class, par value of shares,
shares without par value, and series, if any;

(i) A statement of the amount actually paid in; and

(j) Such additional information as may be necessary or appropriate in order to

enable the Commission to determine whether such corporation is entitled to
a license to transact business in the Philippines, and to determine and assess
the fees payable.
 Attached to the application for license shall be a certificate under
oath duly executed by the authorized official or officials of the
jurisdiction of its incorporation, attesting to the fact that the laws of
the country or State of the applicant allow Filipino citizens and
corporations to do business therein, and that the applicant is an
existing corporation in good standing. If the certificate is in a
foreign language, a translation thereof in English under oath of the
translator shall be attached to the application.

SEC 142 The application for a license to transact business in the Philippines
shall likewise be accompanied by a statement under oath of the
president or any other person authorized by the corporation,
showing to the satisfaction of the Commission and when
appropriate, other governmental agencies that the applicant is
solvent and in sound financial condition, setting forth the assets and
liabilities of the corporation as of the date not exceeding one (1)
year immediately prior to the filing of the application.
Issuance of a License.
Within sixty (60) days after the issuance of the license to
transact business in the Philippines, the licensee, except
foreign banking or insurance corporations, shall deposit with
the Commission for the benefit of present and future
creditors of the licensee in the Philippines, securities
satisfactory to the 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 SEC 143
entities, shares of stock or debt securities that are registered
under Republic Act No. 8799, otherwise known as “The
Securities Regulation Code”, shares of stock in domestic
corporations listed in the stock exchange, shares of stock in
domestic insurance companies and banks, any financial
instrument determined suitable by the Commission, or any
combination thereof with an actual market value of at least
Five hundred thousand pesos (P500,000.00) or such other
amount that may be set by the Commission:
Within six (6) months after each fiscal year of the licensee, the Commission
shall require the licensee to deposit additional securities or financial
instruments equivalent in actual market value to two percent (2%) of the
amount by which the licensee’s gross income for that fiscal year exceeds Ten
million pesos (P10,000,000.00). The Commission shall also require the
deposit of additional securities or financial instruments if the actual market
value of the deposited securities or financial instruments has decreased by at
least ten percent (10%) of their actual market value at the time they were
deposited. The Commission may, at its discretion, release part of the
additional deposit if the gross income of the licensee has decreased, or if the
actual market value of the total deposit has increased, by more than ten
percent (10%) of their actual market value at the time they were deposited.
The Commission may, from time to time, allow the licensee to make
substitute deposits for those already on deposit as long as the licensee is
solvent. Such licensee shall be entitled to collect the interest or dividends on
such deposits.
 Who May be a Resident Agent.

A resident agent may be either an individual residing

in the Philippines or a domestic corporation lawfully
SEC 144 transacting business in the Philippines: Provided, That
an individual resident agent must be of good moral
character and of sound financial standing: Provided,
further. That in case of a domestic corporation who
will act as a resident agent, it must likewise be of
sound financial standing and must show proof that it
is in good standing as certified by the Commission.
Resident agent; Service of Process

-Such corp shall file with the Commission a written power of

attorney designating a person who must be a resin of the PH
Whom summons and other legal processes may be served in
all actions or other legal proceedings against such corp

-Consenting that service upon such resident agent shall be

SEC 145
admitted and held as valid

-Such foreign corporation shall likewise execute and file with

the Commission an agreement or stipulation, executed by the
proper authorities of said corporation
Ways of serving
summons
1. Service on its resident agent designated in accordance
within law for that purpose;

2. Service on the government official designated by law

to receive summons if the corporation does not have a
resident agent; and

3. Service on any of the corp's officer or agents within

the Philippines
 Law Applicable

A foreign corporation lawfully doing business in the

Philippines shall be bound by all laws, rules and

SEC 146 regulations applicable to domestic corporations of

the same class, except those which provide for the
creation, formation, organization or dissolution of
corporations or those which fix the relations,
liabilities, responsibilities, or duties of stockholders,
members, or officers of corporations to each other
or to the corporation.
General Rule: Exception:
Except those which provide for the
creation, formation, organization
shall be bound by all laws, rules and
or dissolution of corporations.
regulation applicable to cosmetic
corporations of the same class
Except those which fix the
relations.

The exception to this rule is the

doctrine of estoppel.
SEC 147
Amendments to Articles of Incorporation or
Bylaws of Foreign Corporations
Whenever the articles of incorporation or bylaws of a
foreign corporation authorized to transact business in the
Philippines are amended, such foreign corporation shall,
within sixty (60) days after the amendment becomes
effective, file with the Commission, and in the proper cases,
with the appropriate government agency, a duly
authenticated copy of the amended articles of incorporation
or bylaws, indicating clearly in capital letters or
underscoring the change or changes made, duly certified by
the authorized official or officials of the country or State of
incorporation. Such filing shall not in itself enlarge or alter
the purpose or purposes for which such corporation is
authorized to transact business in the Philippines.
 Amended License.

A foreign corporation authorized to transact

business in the Philippines shall obtain an

SEC 148 amended license in the event it changes its

corporate name, or desires to pursue other
or additional purposes in the Philippines, by
submitting an application with the
Commission, favorably endorsed by the
appropriate government agency in the
proper cases.
Merger or Consolidation Involving a Foreign
Corporation Licensed in the Philippines.
One or more foreign corporations authorized to transact business in
the Philippines may merge or consolidate with any domestic
corporation or corporations if permitted under Philippine laws and by
the law of its incorporation: Provided, That the requirements on
merger or consolidation as provided in this Code are followed. Page 62
of 73 Whenever a foreign corporation authorized to transact business
in the Philippines shall be a party to a merger or consolidation in its
home country or State as permitted by the law authorizing its
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incorporation, such foreign corporation shall, within sixty (60) days
after the effectivity of such merger or consolidation, file with the
Commission, and in proper cases, with the appropriate government
agency, a copy of the articles of merger or consolidation duly
authenticated by the proper official or officials of the country or State
under whose laws the merger or consolidation was effected: Provided,
however, That if the absorbed corporation is the foreign corporation
doing business in the Philippines, the latter shall at the same time file a
petition for withdrawal of its license in accordance with this Title.
SEC 150
Doing Business Without a License
No foreign corporation transacting business in the
Philippines without a license, or its successors or assigns,
shall be permitted to maintain or intervene in any action,
suit or proceeding in any court or administrative agency
of the Philippines; but such corporation may be sued or
proceeded against before Philippine courts or
administrative tribunals on any valid cause of action
recognized under Philippine laws.
 Revocation of License.

Without prejudice to other grounds provided under

special laws, the license of a foreign corporation to
transact business in the Philippines may be revoked or
suspended by the Commission upon any of the
following grounds:

(a) Failure to file its annual report or pay any fees as

SEC 151 required by this Code:

(b) Failure to appoint and maintain a resident agent in the

Philippines as required by this Title;

(c) Failure, after change of its resident agent or address, to

submit to the Commission a statement of such change as
required by this Title,
(d) Failure to submit to the Commission an authenticated copy of any amendment to its
articles of incorporation or bylaws or of any articles of merger or consolidation within the
time prescribed by this Title:

(e) A misrepresentation of any material matter in any application, report, affidavit or other
document submitted by such corporation pursuant to this Title:

(f) Failure to pay any and all taxes, imposts, assessments or penalties, if any, lawfully due to the
Philippine Government or any of its agencies or political subdivisions;

(g) Transacting business in the Philippines outside of the purpose or purposes for which such
corporation is authorized under its license;

(h) Transacting business in the Philippines as agent of or acting on behalf of any foreign
corporation or entity not duly licensed to do business in the Philippines; or

(i) Any other ground as would render it unfit to transact business in the Philippines.
SEC 152
Issuance of Certificate of Revocation.

Upon the revocation of the license to transact

business in the Philippines, the Commission shall
issue a corresponding certificate of revocation,
furnishing a copy thereof to the appropriate
government agency in the proper cases.
 Withdrawal of Foreign Corporations
– Subject to existing laws and regulations, a foreign
corporation licensed to transact business in the Philippines
may be allowed to withdraw from the Philippines by filing a
petition for withdrawal of license. No certificate of
withdrawal shall be issued by the Commission unless all the
following requirements are met:

SEC 153 (a) All claims which have accrued in the Philippines have
been paid, compromised or settled;

(b) All taxes, imposts, assessments, and penalties, if any,

lawfully due to the Philippine Government or any of its
agencies or political subdivisions, have been paid; and

(c) The petition for withdrawal of license has been published

once a week for three (3) consecutive weeks in a newspaper
of general circulation in the Philippines.