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26 Ateneo L.J. 1 (1981-1982)

handle is hein.journals/ateno26 and id is 1 raw text is: A COMPARISON OF THE CORPORATION LAW AND THE CORPORATION CODE By Atty. ROLANDO F. DEL CASTILLO* The Corporation Code was approved by the President considerably more than thirty days after it had been passed by the National Assembly. Accordingly, prior to its approval, a controversy arose as to whether or not the Code was in effect. For Article X of the Constitution provides that if the Prime Minister (President) fails to act on any bill passed by the National Assembly within thirty days after the date of receipt thereof, it shall become a law as if he had signed it. One issue of Business Day carried two headlines on the Code. One quoted the then Chairman of the Securities and Exchange Commission as saying that he was not sure if the Code was in effect. The other quoted a partner of the country's largest law firm as stating the Code was in effect on the basis of Article X of the Constitution. Only action by the President put the controversy to rest and left to future students of the Code the more difficult task of ascertaining the exact date that it took effect. Recently, another question arose as to the extent the Code is in effect.1 Asso- ciate Commissioner Rosario Lopez of the SEC, citing the Code's transitory provi- sions, states that the Code is fully applicable in respect of corporations organized after its approval by the President.2 In respect of corporations in existence at that time, the articles of incorporation or by-laws of which are in conflict with the Code, she states that these corporations have a period of two years within which to comply with its provisions. The Corporation Code, which was almost ten years in the making3, contains many provisions not found in the old Corporation Law. Many of these new provi- sions, however, do not embody principles radically different from those that were applied under the Coyoiadon Law. They merely formalized rules and regulations that had long .been implemented by the SEC. That this is so, is not surprising. For the version of the new law on corporations that was finally approved, was mainly the handiwork of the SEC. A.B., L.L.B. Ateneo de Manila University, L.L.M. Harvard. 1Commissioner Lopez had been misquoted in the August 30, 1981 issue of the Bulletin Today as having stated that the Code was not yet in effect, allegedly because under the Code's transitory provisions, the Code would take effect in 1982. 2The transitory provision referred to is Section 148, which provides that any corpora- tion lawfully existing in the Philippines on the date of effectivity of the Code, which is affect- ed by the new requirements of the Code, shall be given two years from effectivity of the Code within which to comply with the same. 3The first draft of the Code which was prepared under the auspices of the UP. Law Center, was presented to the President for signature in 1973. It died a natural death. Digitized from Best Copy Available

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