Mr. George A. Pimentel

January 24, 1989 Mr. George A. Pimentel National Food Authority 101 E. Rodriguez Sr. Avenue Quezon City Sir : This refers to your letter, dated January 16, 1989, requesting for information on the extent of authority of SGS Far East Limited, a foreign corporation organized under the laws of Switzerland, more particularly on whether the company is authorized to engage in fumigation services. A verification of the articles of incorporation of subject corporation on file with this Office disclosed that the company was organized "to carry on the business of quality approval, superintendence controlling of weight and quality, checking or tally, inspection, sampling all operations of forwarding, receiving, transit, chartering, transport, handling, customs declarations, consigning, trusteeship, as well as the operation and management of warehouses and analytical laboratories in respect of all merchandise, metals, minerals, liquids, etc. and generally to carry on any business having any direct or indirect connection with this various activities". Thus, subject company was issued a Certificate of Authority No. 1060 from the Board of Investments (BOI), dated November 15, 1978, to establish a branch office in the Philippines "to act as a third party in the inspection of goods subject of international contracts and trade to ensure honesty and fair dealing between international contracting parties", subject to the condition among others that it shall not engage in any other line of business activity without prior BOI approval . On the basis of said Certificate of Authority, the Securities and Exchange Commission, on November 17, 1978, issued the necessary license to operate in the Philippines. In this connection, well-settled is the rule that a corporation has only such powers as are expressly granted in its charter or in the statute under which it is created or such powers as are necessary for the purpose of carrying out its express powers. (13 Am Jur. sec. 739). The corporate business is limited by the corporation's charter, and it is illegal for a corporation to apply either its capital or its profits to objects not contemplated by its charter. (Am. Jur. Supra, citing Dodge v. Vollsey; 18 How (US) 331, 15L. ed. 401). Any such powers as are reasonably necessary to enable corporations to carry out the express powers granted and the purposes of the creation are to be implied as are to be deemed incidental. (Am. Jur., Supra, Sec. 740). Powers merely convenient or useful are not implied if they are not essential, having in view the nature and object of incorporation. (Planters Bank v. Sharp 6 How (US) 301, 12 L ed. 447, cited in Am. Jur. sec. 740). Considering that the company is neither authorized to engage in fumigation services under its articles of incorporation nor under the Certificate of Authority granted by the BOI, it cannot legally engage in said line of business in the Philippines. Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman