FOURTEENTH CONGRESS OF THE REPUBLIC) 
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OF THE PHILIPPINES 
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'7 orr 16 p !; :; 
First Regular Session 
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SENATE 
S. No. 
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 occurs 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 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 term both 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.* 
*This bill was originally filed during the Thirteenth Congress, First Regular Session. 


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OF THE PHILIPPINES 
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FOURTEENTH CONGRESS OF THE REPUBLIC) 
First Regular Session 
1 
SENATE 
S. No. '1759 
Introduced by Senator Miriam Defensor Santiago 
AN ACT 
AMENDING BATAS PAMBANSA BLG. 68, OTHERWISE KNOWN AS THE 
CORPORATION CODE, SECTION 37, GRANTING STOCKHOLDERS THE RIGHT OF 
APPRAISAL WHEN THE TERM OF CORPORATE EXISTENCE IS EXTENDED 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Batas Pambansa Blg. 68, otherwise known as the Corporation Code, 
Section 37 is hereby amended to read as follows: 
"SECTION 37. Power to extend or shorten corporate term. - A private 
corporation may extend or shorten its term as stated in the articles of 
incorporation when approved by a majority vote of the board of directors or 
trustees and ratified at a meeting by the stockholders representing at least two- 
thirds (2/3) of the outstanding capital stock or by at least two-thirds (2/3) of the 
members in case of non-stock corporations. Written notice of the proposed action 
and of the time and place of the meeting shall be addressed to each stockholder or 
member at his place of residence as shown on the books of the corporation and 
deposited to the addressee in the post office with postage prepaid, or served 
personally; PROVIDED, THAT IN CASE OF EXTENSION OF CORPORATE 
TERM. ANY DISSENTING STOCKHOLDER MAY EXERCISE HIS 
APPRAISAL RIGHT UNDER THE CONDITIONS PROVIDED IN THIS 
CODE." 
SECTION 2. Repealing Clause. - Any law, presidential decree or issuance, executive 
order, letter of instruction, administrative order, rule or regulation contrary to, or inconsistent 
with, the provisions of this Act is hereby repealed, modified or amended accordingly. 
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SECTION 3. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
publication in at least two (2) newspapers of general circulation. 
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Approved, 
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