Defining Gov't Corporations under OGCC Jurisdiction

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EXECUTIVE ORDER NO. 596: Defining Gov't Corporations under OGCC Jurisdiction

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Title Source: Supreme Court: Defining Gov't Corporations under OGCC Jurisdiction

Law: Executive Order No. 596

Decision Date: Dec 29, 2006

Executive Order No. 596 clarifies and strengthens the role of the Office of the Government Corporate Counsel in safeguarding the legal interests of Government-Owned or Controlled Corporations and government instrumentalities vested with corporate powers, ensuring consistency and avoiding conflicts.

Law Summary

Definition of Government-Owned or Controlled Corporations (GOCCs)

Defined under PD 2029, GOCCs may be stock or non-stock corporations.
They may perform governmental or proprietary functions.
They are either directly chartered by special law or organized under the general corporation law.
Ownership or control by the government must be direct or indirect through parent or subsidiary corporations, holding at least a majority of the outstanding capital stock or voting stock.

Definition of Government Instrumentality

Per the Administrative Code of 1987, government instrumentalities are agencies of the National Government outside departmental frameworks.
They perform special functions or have jurisdiction granted by law.
They possess some or all corporate powers, manage special funds, and operate autonomously, typically through their own charter.

Conditions for Corporations to be Considered GOCCs

Corporations under general corporation law acquired by government financial institutions but slated for disposal to private ownership are not GOCCs before disposal.
Corporations created under special law explicitly for ultimate private ownership remain GOCCs until such transfer.
Corporations required to register with the SEC despite special law authorization are not considered GOCCs solely on that basis.

Definitions: Parent, Subsidiary, and Affiliate Corporations

Parent Corporation: created by special law.
Subsidiary Corporation: organized under general corporation law, often with government acquisition of majority shares due to debt foreclosure, and subject to government policy for eventual private disposal.
Affiliate Corporation: government ownership is less than majority of outstanding capital stock and voting stock.

Repeal and Modification of Inconsistent Issuances

All executive issuances, rules, and parts thereof inconsistent with this Executive Order are repealed or modified accordingly.

Effectivity

The Executive Order takes effect 15 days after its publication in a national newspaper of general circulation.

END