Not all corporations are successful in its business operations in the Philippines and not all domestic corporations in the Philippines are meant forever. Like humans, corporate life comes to an end and this is what is technically referred to as dissolution and liquidation. Dissolution in the Philippines is the stage of terminating the life of a corporation and liquidation in the Philippines is the process of winding up the affairs, settlement of corporate obligations / debts and distribution of remaining corporate assets through liquidating dividends in the Philippines.
Dissolution of a corporation in the Philippines under the Corporation Code of the Philippines (Batas Bambansa Bilang 68 or BP No. 68) could be involuntary upon Securities and Exchange Commission’s (SEC) complaint coupled with a prescribed process of notice and hearing or voluntary based on the application of the corporation with the SEC. Voluntary dissolution of corporation in the Philippines come in a number of ways as follows:
Of the above ways of dissolving a domestic corporation in the Philippines, the most common is the dissolution be shortening corporate term. Upon approval of the SEC of the amended articles of incorporation with the shortened corporate term, the corporation shall be deemed dissolved without any further proceedings. Hereunder are the normal SEC requirements for dissolution of corporations in the Philippines:
The first two (2) of the above documentary requirements for SEC dissolution by shortening corporate term is for the corporate secretary’s preparation. The third is for the independent certified public accountant (CPA) in the Philippines. The fourth is for the accounting department to provide. The fifth one, BIR clearance, is quite technical for the dissolving corporation because before the BIR will issue a tax clearance, it will see to it that the corporation has no tax liabilities by conducting a tax examination for at least the three (3) taxable years preceding the year of dissolution which has not yet been examined. Publisher’s affidavit is not much of a problem while the endorsement only applies to those corporations with secondary license.
Upon completion of the above documentary requirements for dissolution of corporation in the Philippines and such other requirements the SEC may require, the, process of evaluation and approval may come within less than a month. In the preparation and processing of the application for corporate dissolution, we would suggest you secure services of professional to facilitate the preparation of such documents.
Disclaimer: This article is for general conceptual guidance only and is not a substitute for an expert opinion. Please consult your preferred tax and/or legal consultant for the specific details applicable to your circumstances. For comments, you may please send mail at firstname.lastname@example.org.
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