DISSOLUTION

Extinguishment of the franchise of a corporation and the termination of

its corporate existence. Dissolution implies the termination of its

existence and its utter extinction and obliteration as an entity or body.

Effects: The corporation ceases as a body corporate to continue the
business for which it was established. The assets of the corporation will
then be liquidated and legal title to the remaining corporate properties is
transferred to the stockholders who become co-owners thereof. The
corporation continues as a body corporate for three years for purposes of
winding up or liquidation

1. Voluntary dissolution where no creditors affected (Sec. 118)

a. Majority vote of the Board of Directors or Trustees adopting a
resolution for the dissolution of the corporation
b. Sending of notices to each stockholder or member either by
registered mail or by special delivery, of the time, place and object
of the meeting calling for the approval of the dissolution of the
corporation, at least thirty (30) days prior to said meeting
c. Publication of such notice of meeting for three (3) consecutive
weeks in a newspaper published in the place where the principal
office of said corporation is located, and if none, in a newspaper of
general circulation in the Philippines
d. Ratification of the board resolution for dissolution by the
affirmative vote of the stockholders representing at least two-thirds
(2/3) of the outstanding capital stock, or of at least two-thirds
(2/3) of the members, at meeting called and held for that purpose
e. Filing with the SEC of a copy of the resolution authorizing the
dissolution certified by a majority of the Board of Directors or
Trustees and countersigned by the Corporate Secretary
f. Issuance by the SEC of the certificate of dissolution

2. Voluntary dissolution where creditors affected (Sec. 119)

a. A petition for dissolution shall be filed with the SEC, signed by a

majority of the Board of Directors or Trustees or other officers
having the management of its affairs, verified by its President or
Secretary or one of its affairs, verified by its President or Secretary
or one of its directors or trustees, and shall set forth:
i. All claims and demands against it
ii. That its dissolution was resolved upon by the affirmative
vote of the stockholders representing at least two-thirds (2/3)
of the outstanding capital stock or by at least two-thirds
(2/3) of the members, at a meeting called for that purpose
b. If the petition is sufficient in form and substance, the SEC by an
order reciting the purpose of the petition, shall fix a date on or
before which objections thereto may be filed by any person, which
date shall not be less than thirty (30) days nor more than sixty (60)
days after the entry of the order
c. Before such date, a copy of the order shall be published at least
once a week for three (3) consecutive weeks in a newspaper of
general circulation published in the municipality or city where the
principal office of the corporation is situated, or if there be no such
newspaper, then in a newspaper of general circulation of the
Philippines, and a similar copy shall be posted for three (3)
consecutive weeks in three (3) public places in such municipality
or city
d. Upon five (5) days notice, given after the date on which the right to
file objections as fixed in the order has expired, the SEC shall
proceed to hear the petition and try any issue made by objections
filed;
e. If no such objection is sufficient, and the material allegations of
the petition are true, it shall render judgment dissolving the
corporation and directing such disposition of its assets as justice
requires, and may appoint a receiver to collect such assets and pay
the debts of the corporation

3. Dissolution by shortening corporate term

a. Majority vote of the board of directors or trustees

b. Ratified at a meeting by the stockholders representing at least twothirds (2/3) of the outstanding capital stock or by at least twothirds (2/3) of the members in case of non-stock corporations
c. Written notice of the proposed action and of the time and place of
the meeting shall be addressed to each stockholder or member at
his place of residence as shown on the books of the corporation
d. Filing of the list of the corporate creditors, with their consent to
the shortening of the corporate term
e. Submission of the following with the SEC:
i. Undertaking under oath by the majority stockholders or
principal officers of the corporation that they shall
personally answer for any outstanding obligations of the
corporations
ii. Latest audited financial statements of the corporation which
must not be earlier than the date of the stockholders or
membership meeting approving the amendment to the
articles of incorporation
iii. BIR clearance on the tax liabilities of the corporation