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SIXTEENTH CONGRESS OF THE REPUBLIC 
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OF THE PHILIPPINES 
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First Regular Session 
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NOV 14 ,)4 :15 
SENATE 
S. No, 
1921 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
Appraisal right is the right of a dissenting stockholder to demand appraisal and payment 
of the fair value of his stocks from the corporation., It allows a stockholder who dissents and 
votes against a proposed corporate action to withdraw from the corporation by demanding 
payment of the fair value of his shares. It may be exercised by any stockholder whenever a major 
change in his contract of investment bccurs which he does not'agree and which the law presumes' 
he did not foresee when he bought his shares. 
The Corporation Code, Section 37, on a private corporation's power to extend or shorten 
its corporate term, provides that a dissenting stockholder may exercise his appraisal right in case 
of an extension of corporate term, However, Section 81 of the same Code, which enumerates the 
instances when the appraisal right may be exercised, provides that the appraisal right be 
exercised in both cases of lengthening and shortening the term of corporate existence. 
The lengthening and shortening of corporate terr~ results in a substantial change in a 
stockholder's contract of investment with a corporation, The corporation's term of existence is a 
major factor in considering whether to buy shares in a corporate or not. This bill seeks to 
harmonize Sections 7 and 81 by clearly allowing the appraisal right in both cases of lengthening 
and shortening the term of corporate existence. ' 
~ 
4J~v4_)~ 
MIRIAM DEF 
SOR SANTIfJO 
polK' 
• This bill was originally filed during the Thirteenth Congress, First Regular Session, 
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SIXTEENTH CONGRESS OF THE REPUBLIC· ) 
119tflrr nf ll~r ~"~rrr-~~Ir\l 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
"13 
NOV 14 P 4 :15 
SENATE 
S,No. 1921 
Introduced by Senator Miriam Defensor Santiago 
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AN ACT 
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AMENDING BATAS PAMBANSA BLG. 68, OTHERWISE KNOWN AS THE 
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CORPORATION CODE, SECTION 37, GRANTING STOCKHOLDERS THE RIGHT OF 
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APPRAISAL WHEN THE TERM OF CORPORATE EXISTENCE IS EXTENDED 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
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SECTION 1. Batas Pambansa Big. 68, otherwise known as the Corporation Code, 
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Section 37 is hereby amended to read as follows: 
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"SECTION 37. Power to extend or shorten corporate term. - A private 
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corporation may extend or shorten its term as stated in the articles of 
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incorporation when approved by a majority vote of the board of directors or 
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trustees and ratified at a meeting by the stockholders representing at least two 
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thirds (2/3) of the outstanding capital stock Qrby at least two-thirds (2/3) of the 
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members in case of non-stock corporations. Written notice of the proposed action 
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and of the time and place of the meeting shall be addressed to each stockholder or 
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member at his place of residence as shown on the books of the corporation and 
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deposited to the addressee in the post office with postage prepaid, or served 
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personally; 
PROVIDED, 
THAT 
IN 
CASE 
OF 
EXTENSION 
OF 
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CORPORATE TERM, ANY DISSENTING STOCKHOLDER MAY 
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EXERCISE HIS APPRAISAL RIGHT UNDER THE CONDITIONS 
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PROVIDED IN THIS CODE." 
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SECTION 2, Repealing Clause, - Any law, presidential decree or issuance, executive 
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order, letter of instruction, administrative order, rule, or regulation contrary to or inconsistent 
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with the provisions of this Act is hereby repealed, modified, or amended accordingly. 
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• 


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SECTION 3. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
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publication in at least two (2) newspapers of general circulation. 
Approved, 
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