Mr. Agustin F. Organista

September 7, 1988 Mr. Agustin F. Organista 558 Makiling Street Mandaluyong, Metro Manila Sir : This refers to your letter, dated September 1, 1988, requesting for opinions on the following queries: 1. May a mining corporation, which has been inactive and has not been submitting its reportorial requirements with the Commission, qualify to register/locate mining claims over re-leased public domain areas for mining purpose? cdlex 2. Does the above corporation maintain its legal personality to transact business with the government or its entities? The effect of continuous inoperation of a corporation on its legal existence is found in Section 22 of the Corporation Code of the Philippines, which states thus: "...However, if a corporation has commenced the transaction of its business but subsequently becomes continuously inoperative for a period of at least five (5) years, the same shall be a ground for the suspension or revocation of its corporate franchise or certificate of incorporation. This provision shall not apply if the failure to organize, commence the transaction of its business or the construction of its works, or to continuously operate is due to causes beyond the control of the corporation as may be determined by the Securities and Exchange Commission." The revocation or cancellation of the certificate of registration of a corporation which has commenced the transaction of its business, but subsequently becomes inoperative for at least five (5) years can only be effected by the Commission after due notice and hearing. Thus, the corporation continues to exist notwithstanding its non-operational status until its revocation has been lawfully declared by the Commission. However, the issue on whether a mining corporation which has been dormant may qualify to register/locate mining claims should be properly addressed to the Bureau of Mines & Geo-Sciences. Anent your second query, please be advised that a dormant or inactive corporation falling within the context of the provisions of Section 22 of the Corporation Code, as above quoted, continues to exist and, therefore, maintains its legal capacity to transact business with the government or its instrumentalities. llcd Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman