Corporations created before the Revised Corporation Code are deemed perpetual corporations
Updated: Jul 5, 2020
The Securities and Exchange Commission (SEC) clarified that an existing corporation that was incorporated before the Revised Corporation Code became effective on February 23, 2019 is automatically deemed a perpetual corporation.
This was clarified in SEC-OGC Opinion No. 19-47, issued on Sept. 5, 2019.
The SEC Office of the General Counsel answered a query posed to it as to whether a corporation's existence is already deemed amended by the Revised Corporation Code (RCC). In that query, the corporation informed the SEC that its end of term fell on November 3, 2020. The inquiry was whether the corporation is deemed to have have a perpetual term without need of any further act on part of the shareholders of the corporation.
The SEC answered that there the corporate term is deemed perpetual without need of further action. Unless the corporation notifies the SEC that it elects to retain its specific and limited corporate term pursuant to its Articles of Incorporation, it shall be deemed perpetual without any further action on its part.
The SEC cited paragraph 2, section 11 of the RCC which states:
"Corporations with certificates of incorporation issued prior to the effectivity of this Code, and which continue to exist, shall have perpetual existence, unless the corporation, upon a vote of its stockholders representing a majority of its outstanding capital stock, notifies the Commission that it elects to retain its specific corporate term pursuant to its articles of incorporation: Provided, That any change in the corporate term under this section is without prejudice to the appraisal right of dissenting stockholders in accordance with the provisions of this Code.
This also means that if shareholders of a corporation wish to end its corporate term in accordance with its Article of Incorporation, it should notify the SEC that it wishes to retain its corporate term.