BO II

3. Alhambra Vs SEC

Facts: On January 15, 1912, Alhambra Cigar & Cigarette Manufacturing Company, Inc. was
incorporated. Its lifespan was for 50 years so on January 15, 1962, it expired. Thereafter, its
Board authorized its liquidation. Under the prevailing law, Alhambra has 3 years to liquidate.
In 1963, while Alhambra was liquidating, Republic Act 3531 was enacted. It amended
Section 18 of the Corporation Law; it empowered domestic private corporations to extend
their corporate life beyond the period fixed by the articles of incorporation for a term not to
exceed fifty years in any one instance. Previous to Republic Act 3531, the maximum nonextendible term of such corporations was fifty years.
Alhambra now amended its articles of incorporation to extend its lifespan for another 50
years. The Securities and Exchange Commission (SEC) denied the amended articles of
incorporation.
ISSUE: Whether or not a corporation under liquidation may still amend its articles of
incorporation to extend its lifespan.
HELD: No. Alhambra cannot avail of the new law because it has already expired at the
time of its passage. When a corporation is liquidating pursuant to the statutory period of
three years to liquidate, it is only allowed to continue for the purpose of final closure of its
business and no other purposes. In fact, within that period, the corporation is enjoined from
continuing the business for which it was established. Hence, Alhambras board cannot
validly amend its articles of incorporation to extend its lifespan.