Mr. Tan Kuay

November 10, 1986 Mr. Tan Kuay Community Hardware Co.,Inc. 1137-1139 Pedro Gil St. Paco, Metro Manila Sir : This refers to your letter dated October 22, 1986, inquiring on whether Community Hardware Co., Inc., whose dissolution in accordance with the Corporation Code has been approved by the Commission on July 28, 1986, has still the juridical personality to collect its receivables after its dissolution. In connection therewith Section 122 of the Corporation Code 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 . LexLib 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 stockholders, members, creditors, and other persons in interest. From and after any 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 and other persons in interest. Upon the winding up of the corporate affairs, any asset 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 dissolution and after payment of all its debts and liabilities. (77a, 89a, 16a) (Emphasis supplied). Thus, while the corporation is already dissolved, it continues to exist as a corporate body after dissolution and within three years thereafter only for the specific purpose of closing up its business. ""During the three-year period allowed, it must collect all debts owing to it, and pay all its creditors". (Comments, Notes and Selected Cares on Corporation Code by Campos and Lopez-Campos p. 917). "After the three-year period, as a general rule, it can no longer sue or be sued. But this is subject to certain qualifications. Any litigation filed by or against it within the period of three years, but which could not be terminated, must necessarily prolong that period". (Commentaries and Jurisprudence on the Commercial Laws of the Philippines by Agbayani, 1984 Edition p. 606 citing Pasay Credit and Finance Corporation, (CA 480. G 5528). From the foregoing, your query is answered in the affirmative. Please be advised accordingly. prcd Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman