Mr. Don Mandell

September 4, 1990 Mr. Don Mandell Overseas Assistant 5750 Cumberland St. San Diego, CA 92139 S i r : This refers to your letter dated May 22, 1990 requesting information relative to the replacement of a resident agent of a foreign corporation transacting business in the Philippines. cdll You stated therein that a non-profit corporation organized and existing under the laws of the State of California, U.S.A., is contemplating of filing with the Securities and Exchange Commission an application to transact business under Section 125 of the Corporation Code of the Philippines. The corporation will not engage in any economic activity except the acquisition of property and buildings for the housing of orphans. In obtaining SEC license to transact business you want to be informed on the following: 1. The procedure in replacing the designated resident agent; and 2. If the resident agent is replaced, are the assets of the corporation free and clear from his control or claim? In case of replacement of a resident agent, the Securities and Exchange Commission requires the submission of a duly authenticated copy of the board resolution or certification from the authorized officer of the company formally revoking his appointment as a resident agent of the company, accompanied by a duly authenticated written power of attorney designating the substitute or new resident agent. Anent your second query, the only function of an appointed resident agent under Section 128 of the Corporation Code is to receive summons and other legal processes that may be served in all actions or other legal proceedings against the corporation. Any property that may be acquired by the corporation belongs to it, not to the resident agent. Likewise, the appointment of a resident agent of a foreign company is revocable at any time at the instance of the corporation. Accordingly, he has no control over the assets of the corporation. In connection with your proposed activity, it has to be emphasized that the legal capacity to acquire land in the Philippines is regulated by law. Section 7 Article XII of the Philippine Constitution provides: "Save in cases of hereditary succession, no private lands shall be transferred except to individuals, corporations or associations qualified to acquire or hold lands of public domain ." (Emphasis supplied) Corollary thereto, Section 22 and 23 of Commonwealth Act No. 141, otherwise known as the "Public Land Act" provide: "SECTION 22. Any citizen of lawful age of the Philippines and any such citizen not of lawful age who is a head of a family, and any corporation or association of which at least sixty percentum of the capital stock belongs wholly to citizens of the Philippines, and which is organized and constituted under the laws of the Philippines, and corporate bodies organized in the Philippines authorized under their charters to do so, may purchase any tract of public agricultural land disposable under this Act ..." (Emphasis supplied) SECTION 23. No person, corporation, association, or partnership other than those mentioned in the last preceding section ,may acquire or own agricultural public land or land of any other denomination or classification, which is at the time or was originally really or presumptively, of the public domain, or any permanent improvement thereon, or any real right on such land and improvement. ..." (Emphasis supplied) Thus, only Filipino citizens or corporations at least 60% of the capital stock of which belong to Filipino citizens are qualified to "own" land in the Philippines. However, aliens may be allowed to "lease" lands. In the case of Krivenko vs. Register of Deeds of Manila, G.R. No. L-630, November 15, 1947, (79 Phil. 461), the Supreme Court ruled that while aliens cannot own lands under the Philippine Constitution, they may be granted temporary rights such as lease contracts of lands, this being considered not forbidden by the Constitution. Presidential Decree No. 471 has fixed the maximum period for leases of private lands to such aliens or alien-owned corporations, associations, or entities not qualified to acquire private lands in the Philippines to twenty-five years, renewable for another period of twenty-five years upon mutual agreement of both lessor and lessee. Please be advised accordingly. (SGD.) RODOLFO L. SAMARISTA Associate Commissioner