Perpetual Corporate Existence in the Philippines: Removing the Corporate Term Limit Under the Revised Corporation Code
Introduction: Why corporate term limits matter for long-term operations
Under older corporate practice in the Philippines, many corporations were organized with a fixed term (commonly 50 years). A fixed term creates a predictable “end date” that can affect financing, long-term contracting, succession planning, and continuity of operations—especially as the expiry date approaches.
The Revised Corporation Code of the Philippines changed this default rule by granting corporations perpetual existence, unless a corporation chooses a specific term. This article explains what perpetual existence means today, how pre-2019 corporations are treated, and how older corporations may still formally amend their Articles of Incorporation to reflect a perpetual term for documentation and governance purposes.
Governing law: Perpetual existence is now the default rule
Section 11 of the Revised Corporation Code (Republic Act No. 11232, 2019) provides that a corporation shall have perpetual existence unless its Articles of Incorporation provide otherwise. This reversed the earlier default approach under prior corporate law where corporations typically had a fixed term and needed to extend it through amendments.
The law also recognizes that corporations with certificates of incorporation issued before the Code took effect and that continue to exist are granted perpetual existence, unless they elect to retain a specific corporate term, subject to the conditions stated in the statute (Republic Act No. 11232, 2019).
What changed from the prior regime (and why it matters)
Before the Revised Corporation Code, extension of corporate term was often time-sensitive and could carry significant consequences if the corporation failed to extend before expiry. In earlier jurisprudence, the Supreme Court emphasized that extension must be done before expiration; once the term had expired and the corporation entered liquidation, the law generally allowed only winding up rather than continuation (Alhambra Cigar & Cigarette Manufacturing Company, Inc. v. Securities & Exchange Commission, 1968).
Now, the legal landscape is different: perpetual existence reduces the legal and operational risks linked to term expiry. Section 11 also expressly recognizes a process for revival of corporate existence for corporations whose term already expired, subject to conditions under the Code (Republic Act No. 11232, 2019).
Automatic perpetual existence for existing corporations: the SEC’s guidance
The Securities and Exchange Commission (SEC) issued guidance that corporations existing before the Revised Corporation Code generally receive perpetual existence by operation of law, unless they choose to retain a specific term. SEC Memorandum Circular No. 22, series of 2020 states that the corporate terms of existing corporations are automatically converted to perpetual existence unless the corporation notifies the SEC within the period stated in the issuance that it elects to retain a specific term (SEC Memorandum Circular No. 22, s. 2020).
SEC-OGC opinions also reflect the same position: pre-Code corporations are treated as having perpetual existence automatically, and amending the Articles merely to restate “perpetual” is generally optional rather than a condition for the perpetual term to take effect (SEC-OGC Opinion No. 20-02, 2020; SEC-OGC Opinion No. 19-16, 2019; SEC-OGC Opinion No. 23-17, 2023).
Do older corporations still need to amend the Articles of Incorporation?
In many situations, an amendment is not legally required for pre-2019 corporations to enjoy perpetual existence because the change happens by operation of law under Section 11 of the Revised Corporation Code, as clarified by SEC issuances and opinions (Republic Act No. 11232, 2019; SEC Memorandum Circular No. 22, s. 2020; SEC-OGC Opinion No. 20-02, 2020).
However, corporations often still choose to amend their Articles for documentation, governance clarity, and third-party comfort. Common reasons include lender or investor due diligence, alignment of corporate records, and removing inconsistencies between the Articles and the statutory default rule.
When a formal amendment is commonly requested or preferred
A formal amendment to delete a fixed term or expressly state “perpetual existence” is often preferred where:
1) The corporation is entering long-term transactions (for example, 10–25-year leases, supply agreements, project finance, or concessions) and counterparties request updated Articles.
2) The corporation is preparing for equity transactions such as share subscriptions, private placements, or a sale of controlling interest, where due diligence teams want clean corporate documents.
3) The corporation’s internal governance documents track the old fixed term and management wants alignment across Articles, by-laws, and board/stockholder approvals.
Legal procedure: Amending the Articles to reflect perpetual existence
Where a corporation decides to formally amend its Articles of Incorporation to remove a corporate term limit, the pathway is through an amendment of the Articles filed with the SEC. The Articles must reflect the required contents and format under the Revised Corporation Code (Republic Act No. 11232, 2019).
Section 11 of the Revised Corporation Code also contains timing rules relevant to extending or changing a specific corporate term (for corporations that still maintain a specific term), including limitations on how early an extension may be made unless justifiable reasons exist, and that an extension takes effect only after the original/subsequent expiry date (Republic Act No. 11232, 2019).
Typical corporate approvals and documents (illustrative checklist)
The exact SEC requirements may vary depending on current SEC forms and filing system, but corporations commonly prepare the following:
• Board approval authorizing the amendment and the filing with the SEC
• Stockholder approval at the required vote threshold under the Code and SEC practice
• Amended Articles of Incorporation showing the revised term clause (for example, “perpetual existence”)
• Secretary’s Certificate attesting to due notice, quorum, and results of the vote
• SEC application/cover sheet and filing requirements based on SEC procedures in effect
For corporations that keep a specific term and later extend it, the statutory conditions under Section 11 should be checked carefully (Republic Act No. 11232, 2019).
Fees and reasonableness: a caution from Supreme Court jurisprudence
Corporate filings involve SEC fees. The Supreme Court has held that while the SEC may prescribe rates for incorporation-related filings, the exercise of that authority must be reasonable; fees must be just, fair, and proportionate to the service rendered, and not arbitrary or confiscatory (First Philippine Holdings Corporation v. Securities and Exchange Commission, 2020).
In that case, the Court observed that the Revised Corporation Code’s shift to perpetual existence further supported the conclusion that certain extension-related fee schemes could be unreasonable under the circumstances (First Philippine Holdings Corporation v. Securities and Exchange Commission, 2020; Republic Act No. 11232, 2019).
What if your corporate term already expired?
If a corporation’s term already expired, older doctrine treated post-expiry continuation as impermissible beyond winding up (Alhambra Cigar & Cigarette Manufacturing Company, Inc. v. Securities & Exchange Commission, 1968). The Revised Corporation Code now provides a statutory mechanism for revival of corporate existence for corporations whose term has expired, subject to the Code’s conditions and SEC approval processes (Republic Act No. 11232, 2019).
For regulated entities (such as certain financial intermediaries), the Code requires a favorable recommendation from the appropriate government agency before the SEC approves revival (Republic Act No. 11232, 2019).
Common scenarios and examples
Scenario 1: A 1998 corporation with “50 years” in its Articles. Under SEC guidance, it is generally treated as having perpetual existence by operation of law after the Revised Corporation Code took effect, unless it elected to retain the fixed term. If the corporation wants cleaner documentation for lenders, it may still amend the Articles to state “perpetual existence” (Republic Act No. 11232, 2019; SEC Memorandum Circular No. 22, s. 2020; SEC-OGC Opinion No. 20-02, 2020).
Scenario 2: A corporation approaching its stated expiry date. Even with the statutory default, management should confirm whether the corporation made any election to retain a specific term and review SEC records. If the corporation still has a specific term and needs an extension, observe the timing rules in Section 11 (Republic Act No. 11232, 2019).
Scenario 3: A corporation whose term has already expired. Consider filing for revival under the Revised Corporation Code rather than attempting to “extend” after expiry, since revival is the express statutory solution in the current law (Republic Act No. 11232, 2019).
Summary table: options depending on corporate status
| Corporation status | Likely effect under current law/SEC guidance | Common next step |
|---|---|---|
| Existing pre-2019 corporation with a fixed term in the Articles | Generally treated as perpetual by operation of law unless it elected to retain a specific term | Optional amendment for clarity; confirm no election to retain fixed term |
| Corporation that elected to retain a specific term | Remains subject to that specific term | Amend Articles to shift to perpetual or extend term (observe statutory rules) |
| Corporation with an expired term | May seek revival under Section 11, subject to SEC approval and special requirements for regulated entities | Prepare revival application and required recommendations where applicable |
Final observations and recommendations
1) Verify your SEC records and Articles. Confirm what your Articles currently state and whether the corporation filed any election to retain a specific term under SEC Memorandum Circular No. 22, series of 2020.
2) Consider amending the Articles if third parties require documentary alignment. While perpetual existence may already apply by law, an amendment can reduce friction in financings, audits, and due diligence.
3) If the term already expired, evaluate revival. The Revised Corporation Code expressly allows revival, which is often the cleaner approach than trying to treat the entity as continuously existing.
4) Anticipate filing costs and confirm current SEC fee schedules. Fees should remain reasonable under Supreme Court standards, but corporations should still check current SEC payment requirements and documentation before filing (First Philippine Holdings Corporation v. Securities and Exchange Commission, 2020).
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