March 18, 1993

Atty. Myrna T. Trinidad

Atlas Consolidated Mining

and Development Corporation

15 Flr., Pacific Star Building

Sen. Gil Puyat Avenue, 1200 Makati

Metro Manila

Madam:

This refers to your letter of March 17, 1993 requesting opinion on the query posed therein. cdasia

As stated, Atlas Consolidated Mining and Development Corporation, a Philippine Corporation and Itochu
Corporation, a Company registered in Japan and licensed to do business in the Philippines, formed a
Consortium, the Atlas-Itochu Consortium, for the purpose of bidding for the Mactan International
Airport Development Project with the DOTC. Based on their bidding documents which included among
others the Consortium Agreement, they won the bid and was awarded the project by the National
Government. Under the Consortium Agreement, the parties (Atlas & Itochu) did not agree to form a
separate legal entity for purposes of the project but maintained their separate legal personalities,
defining and delineating their scope of work, obligations and responsibilities while nevertheless
acknowledging a joint and several liability and responsibility for the work on the whole project. On this
basis, you would like to seek our opinion on whether it is necessary for the Consortium to register with
the SEC as separate entity, considering that the same was constituted solely for the purpose of
undertaking the construction of the Mactan International Airport Development Project and which upon
completion thereof, the relationship of the parties will be automatically dissolved.

The Commission, on several occasions, has ruled that two or more corporations may enter into a joint
venture through a contract agreement if the nature of the venture is in line with the business authorized
by their charters, which contract/agreement need not be registered with the Commission, provided,
however, that the joint venture will not result in the formation of a new partnership or corporation.

Considering that the parties to the above mentioned joint venture agreement have no intention to form
a separate legal entity, such agreement need not be registered with the Commission. However, your
attention is invited to the following provision of RA 4566 (An Act Creating The Philippine Licensing Board
for Contractors, Prescribing Its Powers, Duties and Functions, Providing Funds Thereof, and For Other
Purposes):

"SECTION 38. Joint License. It is unlawful for any two or more licensees, each of whom has been
issued a license to engage separately in the capacity of a contractor, to jointly submit a bid or otherwise
act in the capacity of a contractor without first having secured an additional license for acting in the
capacity of such a joint venture or combination in accordance with the provisions of this Act as provided
for an individual, partnership or corporation." LexLib

Please be guided accordingly.

Very truly yours,

(SGD.) FE ELOISA C. GLORIA

Associate Commissioner