What is the effect of non-operation of a corporation in the Philippines?
Pursuant to Sec. 21 of Republic Act No. 11232, otherwise known as the Revised Corporation Code of the Philippines, if a corporation does not formally organize and commence its business within five (5) year from the date of its incorporation, its certificate of incorporation shall be deemed revoked as of the day following the end of the five (5)-year period.
However, if a corporation has commenced its business but subsequently becomes inoperative for a period of at least five (5) consecutive years, the SEC may, after due notice and hearing, place the corporation under delinquent status.
A delinquent corporation shall have a period of two (2) years to resume operations and comply with all requirements that the SEC shall prescribed. Upon the compliance by the corporation, the SEC shall issue an order lifting the delinquent status. Failure to comply with the requirements and resume operations within the period given by the SEC shall cause the revocation of the corporation’s certificate of incorporation.
The SEC shall give reasonable notice to, and coordinate with the appropriate regulatory agency prior to the suspension or revocation of the certificate of incorporation of companies under their special regulatory jurisdiction.
17 July 2025
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Nicolas and De Vega Law Offices is a full-service law firm in the Philippines. You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines. You may also call us at +632 84706126, +632 84706130, +632 84016392 or e-mail us at [email protected]. Visit our website https://ndvlaw.com/.
