Professional Documents
Culture Documents
A. sale or other disposition of assets (4Qs) 4. corp A invest in corp B. corp B declared stock
dividends. Corp A wants to the dividends
1. when is the sale or other disposition of asset
obtained to corp B, to also declare it as
be deemed substantially all the corporate
dividends. Does corp A need the consent of its
property?
stockholders in declaring such?
2. when does the procedure and requirements
5. what happens to cash dividends given to a
set forth by sec 40 does not apply?
delinquent stockholder?
3. in transfer of a corp of all of its assets to
6. what happens to stock dividends given to a
another corp, render the transferee liable for
delinquent stockholder?
the debts of the transferor?
7. may a corp retain surplus profits in excess of
4. give the exception
100%?
B. power to acquire own shares (5Qs) 8. is the declaration of dividends conclusive? Is
1. May a corp acquire its own share? there any exceptions?
C. power to invest corporate funds in another E. power to enter into management contract
corp or business or for any other purpose (3Qs) (2Qs)
1. ultra vires act of the corp, is it illegal? 3. is/are there any case that, no one can
represent or vote the shares of an incapacitated
2. when it is illegal?
or deceased shareholder?
3. what are the consequences of ultra vires act?
4. what if the shares are owned by two or more
G. adoption of by-laws (4Qs) persons jointly, how may the shareholders
vote?
1. does absence of by0laws automatically
dissolves the corp? 5. may a co-owner of shares be proxied?
2. what is a subscription
I. directors’/trustess’ meeting (3Qs)
3. what is a subscription contract
1. diff regular meeting to special meeting
4. does a subscription contract needed to be in
2. who shall preside the meetings?
writing?
3. proxy allowed?
5. what the effect to the subscriber if it is a
J. stockholder’s right to vote and manner of conditional subscription?
voting (12Qs)
6. I will pay my subscription after sale of fish, is
1. as a general rule, a shareholder can vote his it a valid conditional subscription?
share the way he pleases, are there any
7. on what consideration a stock may be paid?
exceptions?
8. May shares of stocks be issued without
2. in pledged or mortgaged shares, who has the
consideration?
right to vote?
9. what is the status of a stock that is issued 3. if the corp issues certificates by virtue of
without consideration? forged or unauthorized transfer, does the
innocent purchaser acquires rights as a
10. who are liable to for issuing watered stocks?
stockholder?
11. requisites of a valid certificate of stock?
M. issuance of stock certificates (2Qs)
12. Is the issuance of a certificate of stock
1. when to issue certificate of stocks?
necessary to consider the subscriber a
stockholder? 2. are the stocks divisible?
13. Are there any instances when a stockholder N. watered stocks (2Qs)
not be able to exercise his rights as such
stockholder 1. how watered stocks are issued?
14. is a certificate of stock a negotiable 2. state the reasons why issuing watered stocks
instrument? is illegal?
15. why register the transfer of cert of stock? O. enforcement of payment of subscription
(7Qs)
16. proper remedy if the corp or the corp sec
refuses to record the transfer of stock? 1. when subscriptions are to be paid?
17. modes of transfer of cert of stock? 2. what are the possible remedies available to
the corp to enforce payment of subscription?
18. does mortgage transfer a cert of stock?
3. after call of payment and the stockholder fails
19. a valid transfer but not registered to the to pay, what is his status?
corp, is the transferee a stockholder?
4. who is the winning bidder in delinquency sale
20. can the transfer of cert of stocks be of stocks?
regulated? May it be non-transferrable?
5. what if there is no bidder?
21. may a cert of stock be transferred by a
notarized deed? 6. what is the effect of delinquent stockholder?
22. is it possible to transfer a cert of stock w/o 7. procedure to obtain a new cert stock in case
delivery and/or endorsement? of lost destroyed or stolen cert of stock
23. is there a time period when to register the P. corp books and records (7Qs)
transfer of cert of stock?
1. where are the corp books and records to be
L. forged and unauthorized transfers (3Qs) kept?
6. is the rights to inspect absolute? 2. would the provisions governing stock corps
applies to non-stock?
7. may right to inspect the books be denied?
3. is cumulative voting allowed?
Q. merger and consolidation (4Qs)
4. purpose of non-stock corp?
1. what happens in merger of corps?
5. may vote by proxy be denied?
2. what happens in consolidation of corps?
6. is membership of a non-stock corp
3. how merger or consolidation commences? transferable?
4. what happens to the rights properties and 7. may the board of trustees be more than 15
liabilities by the absorbed or consolidated persons?
corps?
T. close corps (15Qs)
R. Appraisal Right (11Qs)
1. what are the qualifying conditions to be
1. what is appraisal right? organized as a close corp?
2. when to exercise such right? 2. What if 2/3 of the outstanding capital stock is
3. changing the principal address of the corp. owned by another corporation which is also a
may a stockholder exercise his right to close corporation, will it be a close corporation?
appraisal? 3. what if the 2/3 of the voting stock is owned
4. what is the purpose of exercising such right? by a corp that is not a close corp?
5. is the enumeration in sec 81 exclusive? 4. may a close corp classify its directors?
6. how is the right exercised? 5. may a close corp provide for a greater
quorum of stockholders?
7. what is the effect of exercising such right?
6. what is the liability of a director of a close
8. may a stockholder who has not paid his corp?
whole amount of subscription exercise such
right? 7. how to restrict the transfer of shares?
9. when the right of payment of such rights 8. may a stockholder in close corp sell his shares
ceases? Can the corp use this as an advantage? to 3rd persons?
How? 9. 20 stockholders in a close corp, 2 strangers
10. who bears the cost of appraisal? obtained stocks. May this 2 strangers compel
the corp to register them as stockholders?
11. what does the law require to the dissenting
stockholder who demands payment ffor the fair 10. may a stockholder sell its shares to another?
value of his shares? 11. if one dissented what is his recourse?
S. Non-stock corp (8Qs) 12. do pre-incorporation agreements be
1. what is a non-stock corp? survived by the corp?
14. may stockholders of a close corp pre- 7. may a corp defend or prosecute cases
emptive rights be denied? beyond 3 years given by the law?
15. what if there is a deadlock in voting of a 8. after the 3 yr period, what happens to the
corp action. properties of the corp?
1. what are the types of special corps? 1. distinguish grandfather rule to control test or
liberal rule
2. how is the board of an educ institution
instituted? 2. if a foreign corp wants to do business in PH,
what it must do or obtain?
3. what are these religious corps?
3. is a resident agent required to be assigned by
4. are they required to file AoI to SEC? what
the foreign corp? why?
should the AoI contain?
4. who may be a resident agent?
5. are they required to indicate its term?
5. give the instances when a foreign corp can
6. when does it acquire its juridical personality?
sue or not, and if can be sued or not.
7. does a corp sole possess the same power
6. what constitutes doing business or
rights and privilege to own acquire and hold
transacting business?
real properties like an ordinary corp?
7. is an isolated transaction in pursuant of the
8. in corp sole, will the registration of the
usual business constitutes doing business of
property in the name of the corp sole vest unto
which it would bar the foreign corp to gain
the head the ownership of the property?
access to PH courts?
9. If there is vacancy who will fill it up? What if
8. if the foreign corp has exclusive distributor in
there is no successor?
PH, does it constitute doing business ing PH?
10. may a court order dissolve a corp sole?
Suggested “ANSWER/S”
11. does religious societies required to file its
A.
AoI to SEC?
1. when it will rendered incapable of continuing
V. dissolution (8Qs)
the business or accomplishing the purpose for
1. how may a corp be dissolved? which it was incorporated, sec 40
2. when a corp is dissolved can it continue to be 2. In case the sale is NOT covering all or
a juridical person? substantially all of the assets of a corporation as
to render it incapable of continuing the
3. modes of voluntary dissolution business or accomplishing the purpose for
4. grounds of involuntary dissolution which it was incorporated; or if the proceeds
are to be used to continue the conduct of the
5. after dissolution, what next? remaining business of the company; If the sale
6. ways of liquidation be undertaken is in the usual and regular course of business of
the company. Sec 40
3. Generally where on corporation sells or assets and does not include real properties or
otherwise transfers all o its assets to another other fixed assets. Page 277
corporation, the latter is not liable for the debts
and liabilities of the transferor. Edward j nell co D.
case page 271 1. corporate profits set aside, declared and
4. (1) where the purchaser expressly or ordered by the BOARD to be paid to the
impliedly agrees to assumes such debts; (2) stockholder. page 283
where the transaction amounts to a 2. cash- payable in lawful money, property- pain
consolidation or merger of the corporations; (3) in form of property, and stock- corporation’s
where the purchasing corporation is merely a own shares of stock out of the remaining
continuation of the selling corporation; and (4) unissued shares which would require the
where the transaction is entered into approval of the stockholders representing 2/3
fraudulently in order to escape liability for such of the outstanding capital stock at a regular or
debts. Edward j nell co case page 271 special meeting duly called for that purpose.
This is to be valued at par value or issue price
B.
sec 43
1. Yes, sec 41
3. when the corp has unrestricted retained
2. That the corp has unrestricted retained earnings sec 43
earnings in its books to cover the share to be
4. no, it’s a property dividend sec 43.
purchase or acquire, sec 41
5. it shall first be applied to the unpaid balance
3. yes, a close corp can sec 105, redeemable
on the subscription plus costs and expenses sec
shares can be sec 8, and in case of deadlock sec
43
104
6. it shall be withheld until his subscription is
4. 1. To eliminate fractional shares arising out of
fully paid sec 43
stock dividends; 2. To collect or compromise an
indebtedness to the corporation, arising out of 7. yes in corporate expansion projects or
unpaid subscription, in a delinquency sale, and programs approved by the board, or when the
to purchase delinquent shares sold during said corp is prohibited under any loan agreement
sale; and 3. To pay dissenting or withdrawing with any financial institution or creditor, or
stockholders entitled to payment for their when it can be clear;y shown that such
shares under the provisions of this Code. Sec 41 retention is necessary under special
circumstances obtaining in the corp
5. it becomes treasury shares sec 9
8. yes. Except when they act in bad faith or for a
C.
dishonest purpose or act fraudulently
1. consent and approval of stockholders are oppressively unreasonably or unjustly or abuse
necessary sec 42 of discretion can be shown so as to impair the
rights of the complaining stockholders to their
2. only a board resolution is necessary sec 42 just proportion of corp profits page 285
3. held by SEC to mean an investment in the 9. yes, if it has not been made public or
form of money, stock, bonds and other liquid communicated to the stockholders. Vested
rights. page 285
party who has received benefits from the stock anywhere within phil as provided by the
performance is estopped to set up that the by laws and proper notice. Sec51 sec 93
contract is ultra-vires to defeat an action on the
contract. This is more in conformity with the I.
doctrine that no person shall be allowed to 1. those held monthly or provided by the by-
enrich himself at the expense of another. Page laws. Those that are held at any time upon call
291 of the president or the person authorized
provided by the by-law sec 53
G.
2. shall be presided by the president at all
1. no, it is merely a ground. Loyola grand villas
meetings, unless otherwise provided by the by
case page 304
laws
2. it must not be contrary to law- el hogar case,
3. proxy voting is not allowed because he his
it must not be inconsistent with the AoI, it must
elected because of his expertise in management
be general and uniform in its effect, it must not
or in doing business such that he is expected to
impair obligations and contracts or vested
personally attend and vote on matters brought
rights- gokongwei case, it must be reasonable.
before the meeting. Business judgment rule
All in page 317
5. voidable, subject to ratification sec 50 4. they must vote jointly, in order that the
shares may be voted, they must agree upon the
6. it must be held on the date fixed in the by vote
laws or in accordance with law, prior notice
must be given page 319 it must be held at the 5. yes they it may, consent of the other co-
proper place sec 51 it must be called by the owners are required, however, it is not required
proper party sec 50 last par quorum and voting if there is a written proxy signed by all co-
requirement must be met sec 52 owners or when the shares are owned in an
and/or capacity where any one of the joint
7. no. for stock corp, within city or municipality owners can vote the shares or appoint a proxy
where the principal office of the corp. for non thereof. Sec 56
watered shares, for the satisfaction of their 2. no it will have no rights as against the lawful
claims. Page 349 owner by virtue of the doctrine of non
negotiability of cert of stock. Page 383
16. mandamus page 348
3. yes, since the corp will be estopped to deny
17. endorsement with delivery or duly notarized
the validity thereof, page 383
deed sec 63
M.
18. no, it is merely a security of a loan.
Monserrat case page 351 1. when the full amount of the subscription
together with interest and expenses has been
19. no it must be registered. The transfer is only
paid.
valid to the parties, the corp is not binded until
it is to be registered unson case page 356 2. no they aren’t. page 384
20. yes it may, a reasonable agreement of the N.
parties, and it is also a protection of the corp, as
well as of the individual parties to the contract, 1. For a monetary consideration less than its par
and is reasonable as to the length of time of the or issued value;
suspension of transfer. No the restraint of For a consideration in property, tangible or
trade, suspending the power to sell the stock is intangible, valued in excess of its fair market
an illegal stipulation. Padgett case page 358 and value;
Lambert case page 360
Gratuitously or under an agreement that
21. yes it is, provided that there was no nothing shall be paid at all; or
certificate of stock issued by the corp page 350
endorsement only no delivery In the guise of stock dividends when there are
no surplus profits of the corporation. Page 387
22. yes it is, provided that the transferor is a
stockholder of the corp and has custody voer 2. Corporation is prejudiced
the cert. tan case 376
Stockholders, dilution of interest
23. no there is none, the law does not state that
Creditors are prejudiced, virtue of right to look
the right to register such transfer shall be
upon corporations properties for the
immediately or within a definite period. The
satisfaction of their claims page 388
existence of a right is one thing, and the
duration of said right is another. Won vs O.
wackwack case 379
1. on the date fixed in the contract of
L. subscription or the date that may be specified
by the board of directors pursuant to a call
1. In the former, what is forged or unauthorized
declaring any or all unpaid portion page 389
is the transfer of the certificate from the true
and lawful owner to another person. While the 2. sec 67 to 69 board action and sec 70
latter refers to the act of the corporation in collection case
issuing the certificate, either fraudulently or by
3. he is a delinquent stockholder sec 67
mistake. Page 383
4. the bidder who offers the full amount for the 4. all rights properties and liabilities are
smallest number of shares is the winning acquired by the surviving corp assoc bank vs ca
bidder. Page 392 page 427
4. written request to the corp sec 75 5. no sec 42 investment to another corp, and
purchase of shares at par value sec 105
5. sec 75 last par.
6. sec 82
6. as to a stockholder, no, they may be validly
be denied of inspection. As to a director, no 7. sec 83
they cannot be denied page 410
8. yes by reconciling sec 72 sec 82 and sec 86
7. yes, they may not gain access to highly
9. sec 84 when the corp gives its consent to
sensitive and confidential information.
withdrawal of such right. Yes the corp may use
Gokungwei case page 415, that the person
it. When shareholder A uses his appraisal rights
demanding has improperly used any info
for reasons under the law jan 2016 because the
secured through any prior examination of the
corp is going down. But with few changes and
records or minutes of such corp or of any other
determination of the management they manage
corp, that he was not acting in good faith or for
to turn the corp around and make it profitable
a legit purpose in making his demand or the
again. Shareholder wants to withdraw his
right is limited or restricted by special law or the
demand for payment, but the corp never gave
law of its creation Gonzalez vs pnb case page
its consent. The corp plans to distribute 100M
417
of dividends. The worth of shareholder A is only
Q. 2M, if he be given dividends, He will be earning
more. The corp pays his appraisal right,
1. a union effected by absorbing one or more shareholder A cannot refuse such payment.
existing corps by another which survives and Belat niya, Ladia example.
continues the combined business page 425
10. sec 85
2. uniting of two or more existing corps to form
a new corp page 4216 11. sec 86 to submit his certificate in order that
his accruing to said shares may be effectively
3. sec 76 and 77 suspended. Page 433
S.
3. generally no, but if such right is not limited, 10. yes, with consent of all the stockholders sec
broadened or denied, then it is possible grant 99
by the articles of incorporation or its by-law
11. rescission of the contract or he may use sec
provision sec 89
105 compel the corp
4. sec 88
12. yes sec 100. Pre-incorporation agreements
nd
5. yes it may sec 89 2 par survive and continue to be valid and binding if,
such be the intent of the stockholders, provided
6. no, they are personal to the holder, it is
that the agreement is not inconsistent with the
subject to its criteria sec 89 3rd par sec 36 par 6
articles of incorporation page 455
7. yes sec 92
13. sec 101
8. that he is a member, that majority of them
14. no it cannot as their pre-emptive rights of
must be residents of the phil, and other
the stockholders thereof is broadened to
qualifications provided for in the by-laws sec 98
include all issues without exception unless,
T. denied or limited by the articles of
incorporations sec 102 page 456
1. sec 96 that all the corp’s issued stock of all
classes, exclusive of treasury shares, shall be 15. sec 104
held of record by not more than a specified
U.
number of persons, not exceeding twenty, all
the issued stock of all classes shall be subject to 1. educ corp and religious corp. sec 106 sec 109
one or more specified restrictions on transfer
2. in a non-stock educ corp, multiples of 5
permitted, and the corp shall not list in any
between 5-15 in stock educ corp anywhere
stock exchange or make any public offering of
between 5-15. Sec 108 bp 232
nay of its stock of any class.
3. religious society and corp sole sec 109 sec
2. no, what is material is that the voting shares
110
must be 2/3 not the ownership of capital stocks
sec 96 4. yes, sec 111 and 112
3. still no, the corp must be a close corp sec 96 5. no because they are supposed to exist
forever page 472
4. yes it may, sec 97
6. upon filing its verified AoI. Midterm question.
5. yes it may, sec 97
Sec 112 page 472
6. they are liable as a general partner
7. no court order is required sec 113
7. sec 98 restriction in the articles and
restriction the by-laws and restriction on the
certificate of stocks
8. no it will no vest unto the head, as he is 8. if there are no other claimants, it would be
merely acting as a guardian. Roman cath case escheated to the govt. according to ladia
page 473 lecture. Clemente case page 528 says otherwise
9. sec 114 W.
10. no it cannot be. Separation of church and 1. "shares belonging to corporations or
state. Except in cases in which the purpose is partnerships at least 60% of the capital of which
being carried out and is instead being used for is owned by Filipino citizens shall be considered
illegal purpose, police power as of Philippine nationality," pertains to the
control test or the liberal rule. if the percentage
11. no. sec 116 keyword, “may”
of the Filipino ownership in the corporation or
V. partnership is less than 60%, only the number
of shares corresponding to such percentage
1. sec 117 or expiration of its term. shall be counted as Philippine nationality,"
2. no, it ceases to be one, it will continue as a pertains to the stricter, more stringent
body corporate for another period of 3 years grandfather rule. Narra nickel case gr no
from the time it is dissolved but only for the 195580 april 21 2014
purpose of winding up its affairs and the 2. it must obtain a license sec 125
liquidation of its assets sec 122
3. yes sec 128, because he is the person whom
3. sec 118 no creditors are affected (next to summons and other legal processes may be
impossible scenario). served in all actions or legal proceedings against
sec 119 creditors are affected such corp page 536
FIN.