Mr. Macario Josol

August 16, 1990 Mr. Macario Josol c/o National Power Corporation Iligan City S i r : This refers to your telegram dated July 13, 1990 inquiring whether there is a need to register an association of jeepney operators for purposes of securing a parking permit from the City Government. Please be advised that an association or organization which is not engaged in economic business activity and not desirous of acquiring juridical personality need not be registered with the Commission. However, an unregistered association, unlike a registered one, is not a juridical person and hence, denied the powers, rights and privileges granted under the Corporation Code and which are incident only to incorporation. "The principal distinction lies in the fact that a corporation is a legal entity deriving its existence from franchise, whereas, an association in the narrow sense of the term, is a creature of contract without legal personality separate and distinct from the individuals composing it." ( SEC Opinion dated March 24, 1972 citing 7 C.J.S. p. 21) Thus, an unregistered association cannot sue and be sued, it cannot enter into contracts in the name of the association and neither can it acquire properties under its common name. Contracts entered into in its behalf make the persons signing or executing them liable to the other contracting party. It has been held also that it is not competent to act or create agents or confer upon another authority to act on its behalf, and those who act or purport to act as its representative or agent do so at their own risk. (SEC Opinion, Supra, citing Vda De Salvatierra v. Garlitos et al., L-11442, May 23, 1958) It is only when the association is incorporated under the Corporation Code of the Philippines that it acquired juridical personality, distinct and separate from its members. Such incorporation enables the association to exercise the powers which its charter and the Corporation Code grant to said association. Accordingly, in order to acquire a legal personality to act as a legal unit in the procurement of a parking permit from the Government, the association has to be registered with the Securities and Exchange Commission in accordance with the Corporation Code. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman