Ma. Pelita B. Dotado-Viliran

June 7, 2002 SEC OPINION Ma. Pelita B. Dotado-Viliran Suite 708 Landsdale Tower Mo. Ignacia Cor. Timog Ave. Quezon City M a d a m : This has reference to your letter dated 21 May 2002 requesting opinion of this Commission on the following queries posed therein. Relative to your first query, our record shows that Lobo Institute Inc. (SEC No. 3717) was incorporated on 18 June 1948. Based on SEC company's profile, the corporation has been dissolved as of March 13, 1982. The incorporation of new Lobo Institute.,Inc. (SEC No. A200206960) on 29th April 2002 without the knowledge and consent of the stockholders and with entirely different set of incorporators manifests that it has no legal relation and it has its own personality distinct and separate from the dissolved Lobo Institute, Inc. In relation to your second query, the incorporation of New Lobo Institute, Inc. cannot be treated as one and same entity simply because of their identical corporate names. The expiration of corporate term of old Lobo Institute opened the door for possible appropriation of its name by any person desiring to register the same. Consequently, the registration of new corporation bearing the same name is undoubtedly a different entity as regards the dissolved corporation. Anent your third query, the newly formed corporation cannot be considered as legal successor of the dissolved corporation. As discussed above, the newly created corporation has its own personality distinct and separate from the dissolved corporation. It cannot continue to enjoy the rights and privileges conferred by law particularly the authority granted by the Department of Education and Commission on Higher Education to operate either primary, secondary and college education. Finally, the group of employees who continued the operations of the old Lobo Institute cannot acquire the status of a de facto corporation. It is well settled that where a corporation has had its charter forfeited and its legal existence terminated by a dissolution in law, it is no longer a corporation, either de jure or de facto , and such fact may be shown in any case in which the existence of the corporation is properly in issue, and by private individuals as well as by the state (16A Fletcher 23). As aptly observed by Hector S. De Leon, The Corporation C od e p. 659, the dissolution of a corporation terminates its power to enter into contracts or to continue the business as a going concern, even though it continues its existence for a definite or indefinite time to wind up the business. (16 Fletcher, p. 859). Under Section 122 of the Corporation Code, the winding-up the period is only for the limited purposes enumerated to enable the dissolved corporation to settle its affairs gradually. (SEC Opinion, Aug. 24, 1971). Very truly yours, (SGD.) BENITO A. CATARAN Director Company Registration and Monitoring Department