Nubla, Pedrosa & Associates

August 12, 1988 Nubla, Pedrosa & Associates 2nd Floor, Pan Asia Building 575 Nueve de Pebrero Street Mandaluyong, Metro Manila Attention : Atty . Merle F . Angeles Sir/Madam: This refers to your letter, dated August 3, 1988, requesting for clarification on certain issues raised therein. cdlex As to the company which was incorporated in 1966 but did not have business operation from 1974 onward, Section 22 par. 1 of the Corporation Code of the Philippines reads in part 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 become 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. Meanwhile, should the company desire to resume business operation, it must submit to this Commission a copy of its general information sheet for the current year, copy attached. The filing of the G.I.S. will serve as sufficient notice to the Commission of the resumption of business by the company . Simultaneous with the filing of the G.I.S. or subsequently thereafter, you may likewise submit to the Commission the proper documents relative to the increase of capital stock of the company executed with the formalities prescribed in Section 38 of the Corporation Code. We are enclosing herewith a checklist of the basic requirements for filing the certificate of increase of authorized capital stock. We hope that the foregoing clarified the problem posed in number 3 of your letter. As regards numbers 1 and 2 of your letter, should real properties in addition to cash be the consideration of payment in the increase of capital stock, the documents required are also indicated in the attached checklist. Finally, in connection with the late or non-filing of general information sheet and/or financial statements of a corporation there is transmitted to you herewith a xeroxed copy of the SEC guidelines in the imposition of the proper penalties therefor. llcd Please be guided accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman