Rules Requiring Statement of Reasons for Change in the Corporate Charter or Cessation of Business, and Filing of Corresponding Resolution Authorizing Same

November 4, 1971 RULES REQUIRING STATEMENT OF REASONS FOR CHANGE IN THE CORPORATE CHARTER OR CESSATION OF BUSINESS, AND FILING OF CORRESPONDING RESOLUTION AUTHORIZING SAME In order to apprise the general public and the government of the operational. status of corporations, as well as of the trends and actual business climate of the country, the Commission. pursuant to the powers vested in it under existing laws, hereby promulgates the following rules: cdlex 1. Corporation filing with the Commission documents relative to increase or decrease of capital stock, change of business, creation of bonded indebtedness, merger or consolidation with other corporations, extension or shortening of term of existence, increase or decrease in the number of directors, cessation of business and dissolution, shall state the reasons or causes for said action in the resolution of the stockholders or board of directors approving the same, which resolution, signed and attested by the president and secretary of the corporation, shall accompany the documents. 2. Corporations investing funds in any other corporation or business or for any purpose other than the main purpose for which the company was organized pursuant to Section 171/2 of the Corporation Law, as amended, shall likewise file with the Commission, in duplicate, a copy of the resolution adopted by the affirmative vote of stockholders holding at least two-thirds of the voting power authorizing the board of directors to invest in another corporation or business. The copy of the resolution shall be signed and attested by the president and secretary of the corporation, and submitted to the Commission not later than thirty (30) days after the investment is made. 3. The Commission shall not file the documents referred to in paragraph No. 1 unless the requirement stated therein is complied with. Non-compliance with the requirement contained in paragraph No. 2 shall be penalized by a fine of not less than twenty pesos nor more than one hundred pesos, which may be increased to not exceeding one hundred per centum of the last fine, for repeated violation. 4. These rules shall take effect fifteen (15) days after they have been publicly promulgated by publication in at least two newspapers of general circulation in the Philippines. (SGD.) ARCADIO E. YABYABIN Securities and Exchange Commissioner Approved: November 4, 1971 (SGD.) TROADIO T. QUIAZON, JR. Acting Secretary of Commerce and Industry