Mr. Benedicto C. Acierto

August 15, 1994 Mr. Benedicto C. Acierto Director II Cooperative Development Authority 2nd Flr. Salas Bldg. San Matias, Sto. Tomas, Pampanga S i r : This refers to your letter of June 13, 1994 requesting information on the following queries: 1. Does the act of suspending, cancelling or revoking SEC registered corporations carry with it also the act of blacklisting or the preventive measure against them not to avail of registration with your good office? llcd 2. If so, what are the policies regarding it? 3. How long are these entities and/or individuals blacklisted? 4. Does blacklisting take place after dissolution or may take place even before dissolution? Upon revocation or cancellation of the certificate of registration, the Commission issues a corresponding Revocation Order, in which event the corporation is prohibited to continue its operation and shall be subject to Section 122 of the Corporation Code, which provides: "SECTION 122. Corporate liquidation . Every corporation whose charter expires by its own limitation or is annulled by forfeiture or otherwise , or whose corporate existence for other purposes is terminated in any other manner , shall nevertheless be continued as a body corporate for three (3) years after the time when it would have been so dissolved, for the purpose of prosecuting and defending suits by or against it and enabling it to settle and close its affairs, to dispose of and convey its property and to distribute its assets , but not for the purpose of continuing the business for which it was established. At any time during said three (3) years, said corporation is authorized and empowered to convey all of its property to trustees for the benefit of stockholder, members, creditors, and other persons in interest. From and after such conveyance by the corporation of its property in trust for the benefit of its stockholders, members, creditors and others in interest, all interest which the corporation had in the property terminates the legal interest vests in the trustees, and the beneficial interest in the stockholders, members, creditors or other persons in interest. cdll Upon the winding up of the corporate affairs, any assets distributable to any creditor or stockholder or member who is unknown or cannot be found shall be escheated to the city or municipality where such assets are located. Except by decrease of capital stock and as otherwise allowed by this Code, no corporation shall distribute any of its assets or property except upon lawful distribution and after payment of all its debts and liabilities." (Emphasis supplied) In the case of suspension , a Cease and Desist Order may be issued by the Commission after proper notice and hearing, thereby the operation of the corporation is suspended for a while until the Commission orders otherwise, or the Commission, after proper investigation, motu proprio, or upon verified complaint by any aggrieved party, may issue a cease and desist order without the necessity of a prior hearing if in its judgment the questioned act of the corporation may cause grave or irreparable injury or prejudice to the public. The Commission thereafter shall, with due notice to the corporation or its proper officer, schedule a hearing to determine whether to lift such order or to impose administrative sanction provided by law. Please be advised accordingly. Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner