Mr. F. G. Tagao

February 15, 1982 Mr. F. G. Tagao Sycip, Gorres, Velayo & Co. P. O. Box 589, Manila 2800 Dear Mr. Tagao: This refers to your letter dated December 3, 1981 and its enclosures requesting that the Reading & Bates Exploration Co.,Philippine Branch, be considered in dormant or inactive status without forfeiting its license as such branch office. The provision of law pertinent to your aforementioned request explicitly provides that: SECTION 129. Law applicable . Any foreign corporation lawfully doing business in the Philippines shall be bound by all laws, rules and regulations applicable to domestic corporations of the same class, save and except such only as provide for the creation, formation, organization or dissolution of corporations or such as fix the relations, liabilities, responsibilities, or duties of stockholders, members, or officers of corporations to each other or to the corporation. (Corporation Code of the Philippines, Batas Pambansa Blg. 68) It is therefore clear that any foreign corporation duly licensed to do business in the Philippines must comply with all laws, rules and regulations affecting domestic corporations of the same class. For that matter, the Amended Rules Requiring the Filing of Information Sheet by Domestic Corporations equally apply to Foreign Corporations. The pertinent provision of said rules prescribe that: "4 * . Corporations which have ceased to operate although still existing are likewise not required to comply with these rules provided that a signed resolution of the board of directors stating the cessation of the business has been previously filed with the Commission. If there be no board of directors in office, a statement as to the cessation of business signed and sworn to by the President, Manager, Secretary, Treasurer or duly authorized representative of the corporation, shall be filed in lieu of the resolution of the board of directors." Accordingly, a foreign corporation should file with the Commission a signed resolution of the Board of Directors stating the stoppage of its business activity in the Philippines or in the absence of a Board in office, a sworn statement or affidavit of non-operation executed by the proper officers of the corporation should be filed in lieu of the resolution of the board of directors. However, if it becomes inoperative continuously for a period of five (5) years, the same shall be a ground for the suspension or revocation of its license. (Cf. Section 22, Corporation Code of the Philippines) llcd In view of the foregoing, we regret to inform you that your verbal representation/request that the state of dormancy accorded by this Commission to area or regional headquarters of multinational companies in the Philippines under a special law or PD 218 (by the imposition of conditions prescribed in the ruling of the Ministry of Trade dated October 10, 1975) may not be made applicable to branches of foreign corporations. Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Associate Commissioner * Copied verbatim from documents obtained directly from the Securities and Exchange Commission .