Title XV Flashcards
Foreign Corporations
What are the requisites are needed for foreign corporations to do business in the Philippines?
- The corporation must be formed, organized, or existing under any laws other than those of the Philippines and
- The laws of the country where the corporation was organized allow Filipino citizens and corporations to do business in its own country or state.
What is the Incorporation test?
It is a legal principle where corporations are determined to be foreign based on the place of incorporation.
What is the control test?
What options does a foreign corporation have if it wants to be involved in business in the Philippines or to have an office for a limited purpose>
A foreign corporation can use any of the following forms:
- Subsidiary
- Branch Office
- Representative Office
- Regional Headquarters / Regional Operating Headquarters
What is a subsidiary?
A subsidiary is a corporation that will be organized in the Philippines through the SEC. It is a corporation more than fifty percent (50%) of the voting stock of which is owned or controlled directly or indirectly through one or more intermediaries by another corporation, which thereby becomes a parent company.
What is a representative or a liaison office?
A representative of liaison office deals directly, with the clients of the parent-foreign company but does no derive income from the host country (the Philippines, in this case) and is fully subsidized by its head office.
What is a regional or area headquarters of multinational companies?
A multinational company is a foreign firm or entity engaged in international trade with affiliates, subsidiaries, or branches in the Asia-Pacific Region.
What does Asia-Pacific Region mean in the context of multinational companies?
Asia-Pacific Region means all countries bordering the Pacific Ocean on the side of Asia, including Australia and New Zealand.
What does a branch office mean in the context of foreign corporations?
A branch office of a foreign company carries out the business activities of the head office and derives income from the host country.
It is not a legal independent unit and simply obtain a license to do business in the Philippines. A branch of a foreign corporation is without a legal personality that is separate from the parent company.
Deposit of securities of branch
Reportorial requirements
Notification update form
license
Enumerate the effects if a foreign corporation does business in the Philippines without the required license.
The following effects are expressly provided for in Section 150 of the RCCP:
(1) The foreign corporation is open to court actions against it; and
(2) It shall not be allowed to maintain or intervene in an action, suit or proceeding for its own account in any court or tribunal or agency in the Philippines.
What is the purpose of requiring foreign corporations to secure a license in order to do business in the Philppines?
It is to subject the foreign corporations to the jurisdiction of the local courts; otherwise, a foreign corporation illegally doing business here because of its refusal or neglect to obtain the required license and authority to do business may successfully through unfairly plead such neglect or illegal act so as to avoid service and thereby impugn the jurisdiction of the local courts.
