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    Foreign Corporation

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    박은하
    A foreign corporation is a corporation formed under laws other than the Philippines that allows Filipino citizens and corporations to do business in its country. Foreign corporations can sue and be sued in Philippine courts if they conduct business in the Philippines, whether or not they have a license. Conducting business in the Philippines requires a continuity of commercial dealings and activities normally associated with the corporation's purpose. A single isolated transaction may qualify as doing business if it indicates an intention to conduct further business in the Philippines. The objectives of regulating foreign corporations are to treat them equally to domestic corporations, allow inspection of their operations, and protect local residents doing business with them.

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    Foreign Corporation

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    박은하
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    A foreign corporation is a corporation formed under laws other than the Philippines that allows Filipino citizens and corporations to do business in its country. Foreign corporations can sue and be sued in Philippine courts if they conduct business in the Philippines, whether or not they have a license. Conducting business in the Philippines requires a continuity of commercial dealings and activities normally associated with the corporation's purpose. A single isolated transaction may qualify as doing business if it indicates an intention to conduct further business in the Philippines. The objectives of regulating foreign corporations are to treat them equally to domestic corporations, allow inspection of their operations, and protect local residents doing business with them.

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    FOREIGN CORPORATION

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    A foreign corporation is a corporation formed under laws other than the Philippines that allows Filipino citizens and corporations to do business in its country. Foreign corporations can sue and be sued in Philippine courts if they conduct business in the Philippines, whether or not they have a license. Conducting business in the Philippines requires a continuity of commercial dealings and activities normally associated with the corporation's purpose. A single isolated transaction may qualify as doing business if it indicates an intention to conduct further business in the Philippines. The objectives of regulating foreign corporations are to treat them equally to domestic corporations, allow inspection of their operations, and protect local residents doing business with them.

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    48 views2 pages

    Foreign Corporation

    Uploaded by

    박은하
    A foreign corporation is a corporation formed under laws other than the Philippines that allows Filipino citizens and corporations to do business in its country. Foreign corporations can sue and be sued in Philippine courts if they conduct business in the Philippines, whether or not they have a license. Conducting business in the Philippines requires a continuity of commercial dealings and activities normally associated with the corporation's purpose. A single isolated transaction may qualify as doing business if it indicates an intention to conduct further business in the Philippines. The objectives of regulating foreign corporations are to treat them equally to domestic corporations, allow inspection of their operations, and protect local residents doing business with them.

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    NOTES L - FOREIGN CORPORATION

    FOREIGN CORPORATION – corporation formed, organized or existing under


    any law other than those of the Philippines, and whose laws allow Filipino
    citizens and corporations to do business in its own country or state (Sec. 140,
    RCCP).

    Foreign Corporation – Power to sue and be sued (R. Sundiang, 2014)

    a) Suit By a Foreign Corporation – The foreign corporation transacting


    business in the Philippines without a license to do business shall not be
    permitted to maintain or intervene in any action, suit or proceeding in any
    court or administrative agency.
    b) Suit Against a Foreign Corporation – Any foreign corporation transacting
    business in the Philippines whether or not with a license, may be sued
    against/before Philippine courts or administrative tribunals on any valid
    cause of action recognized under Philippine laws (Doctrine of Quasi-
    Estoppel By Acceptance of Benefits).

    What constitutes doing business” in the Philippines for foreign


    corporations?

    Under the Continuity Test, doing business implies a continuity of


    commercial dealings and arrangements, and contemplates to some extent the
    performance of acts or works or the exercise of some functions normally incident
    to and object of its organization.

    Under the Substance Test, a foreign corporation is doing business in the


    country if it is continuing the body or substance of the enterprise of business for
    which it was organized.

    Note: The two tests are referred to as the “Twin-Characterization Test”


    (Mentholatum Co. v. Mangaliman, 72 Phil. 524).

    Does an “isolated transaction” by a foreign corporation qualify as “doing


    business” in the Philippines?

    It depends. If a single or isolated transaction is incidental and casual


    transaction, it cannot qualify as doing business” since it lacks the element of
    CONTINUITY. However, where a single or isolated transaction is not merely
    incidental or casual but indicates the foreign corporation’s intention to do other
    business in the Philippines, said single act or transaction constitutes “doing
    business” in the Philippines.

    Objectives of regulation of foreign corporations: (De Leon, 2016)

    The objectives of the statutory provisions prescribing conditions under


    which foreign corporations are permitted to do business in a State other than that
    of their creation have been stated as follows:

    (1) To place them on an equality with domestic corporations;


    (2) To subject them to inspection so that their condition may be known; and
    (3) To protect the residents of the State doing business with them by
    subjecting them to the courts of the State.

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