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Regulator tightens rules for re-use of names of dissolved firms

Posted on September 27, 2013 08:32:33 PM [ BusinessWorld Online ]

THE SECURITIES and Exchange Commission (SEC) has tightened rules for re-registration of names of dissolved corporations or those with revoked registration, imposing more requirements before applicants can use such names again.

"The commission en ban, in its meeting on Sept. 12, 2013, resolved to approve amendments to Sec. 15 of SEC Memorandum Circular 5, series of 2008, also known as the Guidelines and Procedures on the Use of Corporate and Partnership Names," according to SEC Memorandum Circular No. 17-2013, dated Sept. 25 and published on Friday.

Under old rules, the name of defunct corporations cannot be used by another firm within "three years from approval of dissolution" or "six years after the revocation…unless its has been allowed at the time of dissolution of revocation by stockholders, members or partners, who represent a majority of the outstanding capital stock or membership of the dissolved corporation or partnership, as the case may be."

The new rules retained such provision but added requirements.

According to the SEC, no application for re-registration will be processed unless it accompanied with the new requirements.

The SEC now requires such applications to have as attachment a board resolution, executed under oath by hold-over board of directors/trustees attesting that:

• the application for re-registration is a new corporation intending to use the name of the dissolved company or revoked corporation;

• re-registration is approved by the majority vote of the directors or trustees and the vote of the stockholders, representing the majority of the outstanding capital stock or membership;

• they shall include a statement in the articles of incorporation of the new corporation that the same is using the name of the dissolved corporation; and

• If applicable, they will no longer file a petition to set aside the order of revocation.

The corporate regulator is also requiring the latest general information sheet of the dissolved corporation stamped "received" by the commission.

At the same time, SEC also said it needed an affidavit, executed under oath by the corporate secretary, stating that:

• There are no properties owned by the defunct corporation due for liquidation; or

• In the case of properties owned by such firms, no property is transferred to the new corporation, or in case of stock corporations, used for subscription payment without undergoing liquidation process.

"Upon approval of re-registration, the certificate of registration to be issued to the new corporation shall indicate its new SEC registration number and pre-generated tax identification number as confirmation that the same is a separate and distinct entity from the dissolved or revoked [sic] corporation," the circular read.

SEC said the amendment takes effect immediately after the publication. -- CHCV  

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