Mr. Alejandrino V. Suarez

October 8, 1990 Mr. Alejandrino V. Suarez CEPOC Employees Welfare and Investment Association, Inc. 23-C Modesta St.,Fatima Hills Guadalupe, Cebu City S i r : This refers to your letter dated September 10, 1990 requesting opinion on the legal effects of the expiration of the term of existence of CEPOC Employees Welfare and Investment Association, Inc. (CEWIAI). It appears that CEWIAI was incorporated/registered on April 6, 1960, with a term of existence of twenty (20) years from and after the date of incorporation. Its term of existence, therefore, has expired on April 6, 1980, and consequently, the corporation is considered dissolved ipso facto. The pertinent provision of the Corporation Code provides: "SECTION 122. Corporate liquidation . Every corporation whose charter expires by its limitation or is annulled by forfeiture or otherwise, or whose corporate existence for other purposes is terminated in any other manner, shall nevertheless be continued as a body corporate for three (3) years after the time when it would have been so dissolved, for the purpose of prosecuting and defending suits by or against it and enable 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 ." (Emphasis supplied) It is very clear from the foregoing provision that upon the expiration of the period fixed, the corporation ceases to exist and is dissolved ipso facto. Hence, it can no longer continue the business or purposes for which it was organized. However, it may be continued as a corporate body for three (3) years only for the purposes of winding up and liquidation .Thus, while the corporation is automatically dissolved after the expiration of its term, nevertheless, it may be continued after the time when it would have been dissolved for the purpose of prosecuting and defending suits by or against it to enable it to settle and close its affairs .After the three-year period, as a general rule, it can no longer sue or be sued. However, any litigation filed by or against it within the period of three years, but which could not be terminated, must necessarily prolong that period. (Agbayani, Commercial Laws of the Philippines citing Pasay Credit and Finance Corporation (CA) 48 O.G. 5528) Please be advised, however, that a corporation, whose corporate existence has already expired, can be reincorporated by filing a new articles of incorporation and by-laws using the same corporate name. (SGD.) ROSARIO N. LOPEZ Chairman