Marvi Agro-Industrial Financing Corp.

August 27, 1984 Marvi Agro-Industrial Financing Corp. 1401 M. Adriatico corner Sta. Monica Ermita, Manila Gentlemen: This refers to your letter dated August 17, 1984, bringing to the attention of this Commission the application for renewal of your Certificate of Authority to operate as a financing company. Under the Basic Rules and Regulations to Implement the Provisions of Republic Act 5980 , otherwise known as "An act Regulating the Organization and Operation of Financing Companies", specifically Section 8 thereof, "direct lending" was impliedly considered as a financing activity. The rule provides, thus: "SECTION 8. In the case of direct loans, the pertinent rates provided for by the Usury Law, Act No. 2655, shall be applicable." A careful restudy of R.A. 5980, however, reveals that "direct lending" is not a financing activity. Section 3(a) thereof defines financing companies as follows: "(a) 'Financing Companies' hereinafter called companies, are corporations or partnerships, except those regulated by the Central Bank of the Philippines, the Insurance Commissioner and the Cooperative Administration Office, which are primarily organized for the purpose of extending credit facilities to consumers and to industrial, commercial or agricultural enterprises, either by discounting or factoring commercial papers or accounts receivable, or by buying and selling contracts, leases, chattel mortgages, or other evidence of indebtedness, or by leasing of motor vehicles, heavy equipment and industrial machinery, business and office machines and equipment, appliances and other movable property." Applying the principle of " Expressio Unius Est Exclusio Alterius ", direct lending would not be included as a financing activity within the purview of R.A. 5980. (SEC Opinion dated July 24, 1984; January 18, 1984). The above ruling is, however, without prejudice to the power of the corporation to engage in direct lending if so authorized in the secondary purposes of its articles of incorporation. Considering that your corporation is not engaged in financing activities, it should amend the primary purpose of its articles of incorporation. Corollary thereto, it is advised that the word "Financing" as part of its corporate name be deleted pursuant to the provision of Section 4(b) of the "Basic Rules and Regulations to Implement the Provisions of R.A. 5980: ", which provides, thus: "No person, association, partnership or corporation shall hold itself out as doing business as a 'Financing Company' or 'finance and investment company' or under any other title or name tending to give the public the impression that it is engaged as a financing company unless so authorized under R.A. No. 5980." The corresponding amendments of Articles I and II of your Articles of Incorporation must be done in accordance with Section 16 of the Corporation Code of the Philippines. Please be advised accordingly. Very truly yours, (SGD.) MANUEL G. ABELLO Chairman