Atty. Francisco Collado

February 4, 2003 SEC OPINION NO. 04-03 Atty. Francisco Collado Chairman of the Board and Legal Counsel Osias Educational Foundation, Inc. Balaoan, La Union S i r : This refers to your letter requesting clarification on the corporate existence of Osias Educational Foundation, Inc. and the issuance of a corresponding certification in relation therein. EHTIDA Records show that on July 7, 1947, Osias Colleges, Incorporated was registered with this Commission originally for a term of fifty (50) years. Its articles of incorporation, particularly the fourth article states: "That the term for which said corporation is to exist is fifty years from and after the date of incorporation." On May 4, 1972, however, an application to amend the articles of incorporation of the subject corporation was approved by this Commission. Said amendment covered among others, the change in the corporate name from Osias Colleges, Incorporated to Osias Educational Foundation, Inc. Likewise, the term of existence of the corporation was amended from the original fifty (50) years to that of perpetual existence . Now the issue for consideration before this Commission is whether or not, based on the facts given, Osias Educational Foundation, Inc. is an existing corporation. Under the old Corporation Code, no maximum corporate term of existence was prescribed for educational institutions, hence many schools were incorporated without any provision in their articles of incorporation as to their term of existence. When the New Corporation Code took effect in May 1 of 1980, the said law provided for a maximum period of corporate existence of fifty (50) years. Now, question is raised as to the applicable reckoning date for the counting of the required period. The pertinent provisions of the Corporation Code provides: "SECTION 148. Applicability to existing corporation . All corporations lawfully existing and doing business in the Philippines on the date of the effectivity of this Code and heretofore authorized, licensed or registered by the Securities and Exchange Commission, shall be deemed to have been authorized, licensed or registered under the terms and conditions of its license, and shall be governed by the provisions hereof: Provided, That where any such corporation is affected by the new requirements of this Code, said corporation shall unless otherwise herein provided be given a period not more than two (2) years from the effectivity of this Code within which to comply with the same." In an Opinion dated September 25, 1990, addressed to Atty. Sabino Padilla, the Commission has ruled that in case of "failure on the part of affected corporations to amend their articles of incorporation to comply with the applicable provisions of the Code on or before May 1, 1982, the expiry date of the two (2)-year period, the Commission will consider the provisions therein as written into the articles of incorporation as of May 1, 1980, the date of effectivity of the Corporation Code. (SEC Opinions dated April 26 and June 29, 1982) Thus, applying this ruling in the instant case, the 50-year period should be counted from May 1, 1980. On the strength of the principles laid down in the Padilla Opinion, the Osias Educational Foundation, Inc. can be deemed to exist for a period of fifty (50) years to be reckoned from May 1, 1980, the date of effectivity of the new Corporation Code because the situation in the instant case fits the conditions laid down in the Padilla Opinion. First, Osias Colleges Incorporated was incorporated under the Old Corporation Code. Although its original corporate term provided for a maximum period of fifty (50) years, the same was amended to provide for perpetual existence at the time that old law was still in force and effect. And when the new Corporation Code became effective, the subject corporation never complied with the two (2)-year compliance period thereof. Clearly therefore, the term of existence of Osias Educational Foundation, Inc. will expire on May 1, 2030 unless sooner dissolved or unless said period is extended within the prescribed period under the law. Very truly yours, (SGD.) VERNETTE UMALI-PACO General Counsel