SOP Exhibits

Title:

Annex 2 - G/lines in the Evaln. of Application for Quedan Special Franchise

SOP Number : BR-QM03

ANNEX 2

GUIDELINES IN THE EVALUATION OF APPLICATION FOR QUEDAN SPECIAL FRANCHISE

I. DOCUMENTARY REQUIREMENTS -

A. Application for Special Franchise

I. Applicant is a natural person

1. Legal capacity
2. Citizenship

II. Applicant is a Corporation

1. Legal Capacity
2. Documents to be submitted:

a. Articles of Incorporation and all amendments thereto (if any) and SEC Certificate of Registration.
b. By-laws and all amendments thereto (if any) and SEC Certificate of Registration.
c. Resolution of the Board of Directors and/or Stockholders (where stockholders vote is required by law) certified under oath by the Corporate Secretary, authorizing the transaction and designating the authorized signatory.
d. Certificate under oath of the Corporate Secretary, listing the incumbent officers and principal stockholders.

III. Applicant is a partnership

1. Legal capacity
2. Documents to be submitted

a. Articles of Partnerships
b. SEC Certificate of Registration

IV. Applicant is an estate

1. Court order appointing the Special Administrator/Administrator/Executor
2. Court order authorizing the duly appointed Special Administrator/Administrator/Executor to
Contract the loan.

B. Application for License and Official Receipts

1. Warehousing
2. Milling
3. Retailing
4. Wholesaling
5. Others

C. Clearance

1. Police Clearance
2. BIR Clearance
3. RTC Clearance

D. Fire Insurance/Surety Bond

1. Fire Insurance
2. Surety Bond

E. Financial Status

1. ITR for immediately preceeding three (3) years
2. BIR Official Receipt and bank confirmation receipt
3. Financial statement - Statement of Assets and Liabilities,
Profit and Loss Statement, Balance Sheet.

F. Proof of Ownership/Leasehold Rights of Warehouse/Ricemill

1. Transfer Certificate of Title/s
2. Contract of Lease

G. Physical Description of Warehouse

1. Warehouse Sketch
2. Actual capacity (maximum allowable quantity)
3. Picture

H. Documents prepared by Investigator

1. Facility Inspection Report
2. Background Investigation

I. Others

1. Specimen signatures of applicant witnessed by RLO/QGFB-OO
2. Impressions of dry seal
3. Picture of applicant
4. Blueprint of warehouse

II. EVALUATION OF DOCUMENTARY REQUIREMENTS

A. Application for Special Franchise

I. Applicant is a natural person

1. A natural person generally has legal capacity to contract loans unless he suffers from some l legal disability/incapacity as in the following cases:

a. Minors
b. Individuals under guardianship
c. Spouses

2. The applicant must be a Filipino citizen. The proof of citizenship of a naturalized citizen must be established by a Certificate of Registration issued by an appropriate Court, documents evidencing election of Philippine citizenship pursuant to the provisions of the 1935 Constitution.

II. Applicant is a corporation

1. The legal capacity of the corporation to contract a loan depends on:

a. Articles of Incorporation
b. Other applicable laws and regulations
c. Appropriate resolution of its Board of Directors

2. Documents to be submitted:

a. Articles of Incorporation and all amendments thereto (if any) to determine whether:

1. Applicant has been duly incorporated
2. It has legal capacity to contract

b. By-laws and all amendments thereto (if any) and SEC Certificate of Registration - to determine the appropriate signatory for the corporation.

c. Resolution of the Board of Directors and/or Stockers (where stockholders vote is required by law) certified under oath by the Corporate Secretary, authorizing the transaction and designating the authorized signatory. The resolution should be consistent with the By-Laws of the corporation.

d. Certificate under oath of the Corporate Secretary, listing the incumbent officers and principal stockholders to determine who may sign for the corporation in the loan and/or who shall be the solidary obligors of the loan. The list can also be used to determine the citizenship of the incumbent offers and principal stockholders.

III. Applicant is a partnership
1. The legal capacity to contract is determined by:

a. Articles of partnership
b. Civil Code provisions on partnership
c. Other applicable laws and regulations

2. Documents for submission

a. Articles of Partnership embodied in a public instrument and duly registered with SEC if capital is P3,000.00 or more.
b. SEC Certificate of Registration, if capital is P3,000.00 or more

Unless otherwise provided in the Articles of Partnership, any general partner has the authority to bond the partnership.

B. Application for License

1. Official Receipts for payment of fees
2. Application fee and documentary stamps

C. Clearances

1. Determine if applicant has a pending criminal case, convicted of a crime or has derogatory character.

D. Fire Insurance/Surety Bond

1. Amount of Surety Bond for owned warehouses should be equivalent to 33-1/3% of the existing government support price of the maximum quantity of commodity to be received.

2. Amount of Surety Bond for leased warehouse should be 50% of the market value.

3. Fire Insurance is a requirement of the General Bonded Warehouse Act (Act No. 3893, as amended)

E. Financial Status

1. Compare income declared and tax paid thereon as against income declared in Statement of Assets and Liabilities, Loans and Income Statement, Balance Sheet, Profit and Loss Statement and as against the amount of loan applied for. Discrepancy may arise which may cost doubt on the financial position, means and credit standing of applicant.

2. BIR Official Receipt and Bank Confirmation Receipt are proofs of payment of income tax.

3. Financial Statements - Statement of Assets and Liabilities Profit and Loss Statement, Balance Sheet must be certified and confirmed by a duly licensed CPA.

F. Proof of Ownership/Leasehold Rights of Warehouse/Ricemill

1. Transfer Certificate of Title -

a. In the name of applicant or spouse
b. If owned by several persons, affidavit of co-owners declaring that applicant is entitled to a specific share thereof.
c. Special Power of Attorney - to be executed by co-owners authorizing applicant (co-owner) to manage warehouse/ricemill and apply for a Special Franchise.
d. Encumbrances annotated at back portion of TCT such as mortgages, sales, notice lis pendens, etc. (if any).
e. TCT if still valid and existing as same might have been cancelled or replaced with a new one as a result of cancellation, subdivision of the real estate.

2. If applicant does not own ricemill/warehouse -

2.1 Contract of Lease

a. Duration of Contract
b. Effectivity
c. Authority of Leaser to Lease Warehouse/Ricemill
d. Other terms and conditions of lease

G. Physical Description of Ricemill/Warehouse

1. Warehouse Sketch

a. Warehouse sketch showing actual length, height, and width.
b. Physical features of warehouse, i.e. concrete, wooden, G.I, sidings, etc.

2. Actual capacity - maximum allowable capaicty taking into account allowances for alleyways, distances between wall to pile and pile to pile and hte distance from ceiling to pile.

H. Documents to be Submitted by Investigagor

1. Facility Inspection Report - entries therein should not be inconsistent and remarks/observations of Investigator must be taken into consideration.

2. Background Investigation Report * - to contain information on applicant/s:

a. Personal circumstances
b. Family background
c. Character, integrity and reputation in the community
d. Legal capacity to contract
e. Ownership of warehouse/ricemill
f. Bank verification to determine outstanding loans and obligations with banking and
financial institutions and financing standing of applicant
g. Such other relevant information such as other business applicant is engaged in
peculiar activities and habits such as heavy gambling, criminal activities, drug
addiction, etc.

* Copy furnish QGFB operations officer if new applicant/borrower

I. Others

1. Specimen signatures of applicant witnessed by RLO/QGFB-OO
2. Impressions of dry seal must be clear
3. Picture of applicant
4. Blueprint of Warehouse/Ricemill indicating floor plan, actual space occupied by ricemill apparatus, prime mover and transmission, office space and such other relevant information














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