Under the Revised Corporation Code, a corporation now has perpetual existence by default, unless its articles of incorporation provide otherwise. This changed the old rule under the previous Corporation Code, where corporations had a maximum term of fifty years, renewable. Existing corporations whose terms had not yet expired when the Revised Code took effect are deemed to have perpetual existence, unless a majority vote of the stockholders elects to retain a specific term. A corporation may still choose a fixed term in its articles, and it may extend or shorten that term by amending the articles. Importantly, a corporation whose term has already expired may apply for revival of its corporate existence, which, if approved by the SEC, restores the corporation as if its term had never expired, with all its rights and obligations. Perpetual existence gives businesses continuity and removes the need to periodically renew the corporate term.
How long does a corporation last? Under the current law, the default answer is forever — a major change from the old rule.
The New Default: Perpetual Existence
Under the Revised Corporation Code, a corporation now has perpetual existence by default — unless its articles of incorporation provide otherwise. It does not automatically die after a set number of years.
What Changed
Under the old Corporation Code, corporations had a maximum term of fifty (50) years, renewable for further periods. A corporation that forgot to renew before expiry could be dissolved. The shift to perpetual existence removed this trap and gave businesses continuity.
Existing Corporations
For corporations that existed when the Revised Code took effect:
- Those whose terms had not yet expired are deemed to have perpetual existence; but
- They may, by a majority vote of the stockholders, elect to retain a specific term instead.
Choosing a Fixed Term
A corporation may still choose a fixed term in its articles if it wishes. It may also extend or shorten its term by amending the articles of incorporation (which may trigger the appraisal right of dissenting stockholders).
Reviving an Expired Corporation
A significant remedy: a corporation whose term already expired may apply for revival of its corporate existence. If approved by the SEC, the revival restores the corporation as if its term had never expired — with all its rights, privileges, and obligations, and its assets and liabilities. This rescues corporations that lapsed under the old fifty-year rule.
Practical Takeaways
- Corporations now have perpetual existence by default under the Revised Corporation Code;
- Existing non-expired corporations are deemed perpetual, unless stockholders vote to keep a specific term;
- A corporation that already expired can apply to the SEC for revival, restoring it as if the term never lapsed.
Frequently Asked Questions
How long does a corporation exist? Under the Revised Corporation Code, a corporation now has perpetual existence by default, unless its articles of incorporation provide otherwise. It does not automatically end after a set number of years.
What was the old rule on corporate term? Under the previous Corporation Code, corporations had a maximum term of fifty years, renewable. A corporation that failed to renew before expiry could be dissolved.
Can a corporation still choose a fixed term? Yes. A corporation may choose a fixed term in its articles and may extend or shorten it by amending the articles. Existing non-expired corporations are deemed perpetual unless stockholders vote to retain a specific term.
Can an expired corporation be revived? Yes. A corporation whose term already expired may apply to the SEC for revival of its corporate existence. If approved, the revival restores the corporation as if its term had never expired, with all its rights and obligations.
This commentary is for general informational purposes only and does not constitute legal advice. For guidance specific to your situation, please consult a licensed attorney.
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