Atty. Rosario G. Encarnacion

August 29, 1994 Atty. Rosario G. Encarnacion Barbadillo Siozon Egargo & Associates 154 G. Araneta Ave.,Quezon City M a d a m : This refers to your letter of August 29, 1994 requesting opinion relative to the continuity of the business operations and personality of a single proprietorship where the single proprietor has decided to incorporate or convert it to a corporation for business expansion. As stated, it is now required that only corporations can pre-qualify in public bidding for security service. However, in many instances, the bidders are required to be in operation for 5 years. If the corporation has just been organized and registered with the SEC may it be considered in operation for 5 years as a requisite to pre-qualify in public bidding to include its prior existence as a single proprietorship where the single proprietor/owner is the principal or majority stockholder of the newly organized corporation? The pertinent provision of the Civil Code of the Philippines provides: "ARTICLE 44. The following are juridical persons : (1) The State and its political subdivisions; (2) Other corporations ,institutions and entities for public interests or purposes, created by law ,their personality begins as soon as they have been constituted according to law ; (3) Corporations, partnerships and associations for private interest or purpose to which the law grants a juridical personality, separate and distinct from that of each shareholder ,partner or member." (Emphasis supplied) cdll Likewise, the Corporation Code provides: "SECTION 19. Commencement of corporate existence . A private corporation formed or organized under this Code commences to have corporate existence and juridical personality and is deemed incorporated from the date the Securities and Exchange Commission issues a certificate of incorporation under its official seal; and thereupon the incorporators, stockholders/members and their successors shall constitute a body politic and corporate under the name stated in the articles of incorporation for the period of time mentioned therein, unless said period is extended or the corporation is sooner dissolved in accordance with law." (Emphasis supplied) It is clear from the foregoing provisions that a private corporation begins to exist as a juridical person only from the moment a certificate of incorporation is granted to it by the Securities and Exchange Commission, and once incorporated it acquires a separate and distinct personality from that of each shareholder. llcd Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner