Pengson (International) Trading Corporation

February 9, 1982 Pengson (International) Trading Corporation c/o Atty. Romeo U. Alcazar 2nd Floor, Philflex Bldg. 407 Dasmarias cor. David St. Sta. Cruz, Manila Sir : This refers to your letter of October 9, 1981 requesting for an opinion as to whether the PENGSON (INTERNATIONAL) TRADING CORPORATION, a 100% Filipino corporation, may engage in retail business on the basis of its primary purpose which provides: "To engage in and carry on the business as distributors of general merchandise such as, but not limited to electrical appliances, electronic apparatus, hardware, construction materials, machinery, grocery goods, . . . . " The test to be applied is whether the act in question is in direct and immediate furtherance of the corporation's business; fairly incident to the express powers and reasonably necessary to their exercise. If so, the corporation has the power to do it, otherwise, not" (6 Fletcher, Cyclopedia of Corporation) Section 2487 pp. 198-199) The word " distribution " is defined as "one who or that which distributes; an agent or business firm that distributes goods to consumers" (Webster's New Twentieth Dictionary, 2nd Ed., 1958). Under Section 1 of Republic Act 1180, otherwise known as the Retail Trade Nationalization Law, "No corporation the capital of which is not wholly owned by citizens of the Philippines shall engage directly or indirectly in retail business." In view of the foregoing, this Office is of the opinion, since the Filipino Financial Corporation, as stated in your said letter is a 100% Filipino corporation, the same may legally engage in retail business pursuant to its primary purpose. Please be guided accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Associate Commissioner