Valid/Invalid/Explain the answer
note: The coverage of the midterms is from start until Corporate Powers, and then Financing the Corporation and Consideration for shares. The previous midterms finals would have covered start until Control and Management, thus for 2s, 09-10, some of the questions in the finals have been included in this compilation.
Formation of a Corporation; when Start
The juridical personality and capacity to contract of a corporation cannot be given retroactive effect. (Finals, 2s, 06-07) (Section 1; Section 19; Section 36; McArthur vs. Times Printing; Caram vs. CA)
Unincorporated juridical entities have no capacity to contract (Midterms, 2s, 07-08) (Section 1; Section 19; Section 36…)
Formation of Corporation; when start; Promoters
Explain the extent of services that may be rendered by promoters to: (1) a corporation in the process of incorporation and (2) an incorporated entity which is an on-going business concern. Will the extent of such services affect the resulting obligations deemed assumed by such promoters? (m.1s.09-10)
Promoters, whose services are engaged by a corporate entity in the process of incorporation, shall be deemed to be acting for and in behalf of persons who seek to organize and establish such corporate entity. (m.1s.06-07) (Section 19: commencement of corporate existence; Section 36: memorize catch all provision for powers of corporation; Mc Arthur vs. Times Printing) (style: define what a promoter is; when corporate existence to exercise corporate powers; then cite why corporation liable even for contracts pre-inc)
Contractual arrangements with corporations in the process of incorporation are not automatically binding on such corporations after the same have been issued certificates of registration by the SEC. (m.2s.08-09) (Section 19: start of corporate existence – when capacity to contract; Section 45: ultra vires acts; Section 36: corporate powers; McArthur vs. Times Printing: if ratified, binding upon corp)
formation of a corporation; incorporators
Corporations have no legal right to participate in the organization and incorporation of new corporate entities. (m.1s.08-09) (Sec10: Only natural persons may become incorporators; After incorporation, pede na…)
Formation of a corporation; Foreign ownership
Tim Tinio, an investment banker, obtained from his local and international clients the mandate to organize and establish a corporation which shall be engaged in the businesses of constructing, operating, and maintaining a nation-wide chain of hotels/resorts in the country. Will there be any limitations affecting the equity ownership of the clients of Tim in the corporation? (Midterms, 2s, 07-08) (Consti, Art 12…; JG Summit Case)
Tim Tinio, an investment banker, obtained from his local and international clients the mandate to organize and establish a corporation which shall be engaged in the businesses of constructing, operating, and maintaining a nation-wide chain of hotels/resorts in the country. Will it be advisable for Tim to enter into and conclude w/ third parties contractual arrangements (e.g. acquisition or lease of real property) essential for the pursuit of the business of the corporation, prior to its incorporation? (Midterms, 2s, 07-08) (JG Summit Case)
The 60/40 ration on the extent of foreign equity ownership of corporations imposes a limitation on the businesses that may be pursued by corporations. (m.1s.08-09) (JG Summit Case; Section 17, CC: reject AOI if equity not comply w/ consti; Article 12, Section 11 1987 Section 11. No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines.)
Articles of incorporation; corporate name
The change in the corporate name of the financial institution in the case of PC Javier and Sons Inc is directly attributable to…a change in the ownership of the outstanding shares of stock of the financial institution. (m.2s.08-09) (Section 14: contents of AOI; Section 18: requirements for corporate name; PC Javier & Sons; Philips Export vs CA)
Articles of Incorporation; By Laws
The Articles of Incorporation and By-laws of corporation delineate the nature and extent of the proprietary rights of the stockholders. (m.1.97-98)
Restrictions on the transferability of shares of stock will not be upheld by the proper courts. (m.1s.08-09) (Fleischer vs. Botica Nolasco – was not upheld: can’t restrict rights of SH to transfer property; note: dapat reasonable restrictions…see campos)
SEC Jurisdiction
Sagasa Transp. Corp. (STC), a corporation engaged in the operation of a fleet of taxis had the immediate need to upgrade its vehicles. Although the business of STC generated revenues, the Corporation did not have sufficient capital to pay for the vehicles it wanted to acquire. Mando Rugas, an importer of reconditioned vehicles, confirmed his interest in investing in STC. Mando agreed to convey 60 Coronas for P30M worth of shares, under a swap arrangement. In the event of STC holds in abeyance the issuance of the shares of stock in favor of Mando, does the latter have the right to institute the appropriate action before the SEC to compel the issuance of his stock certificate? (Finals, Unknown date) (SEC Jurisdiction; Abejo vs. CA)
Note: RA 8799 or the Securities Regulation Code transferred the jurisdiction of SEC over intracorporate disputes (formerly Section 5 of PD902-A) to RTC. These acts include:
Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations, partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to hear and decide cases involving.
(a) Devices or schemes employed by or any acts, of the board of directors, business associates, its officers or partnership, amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or of the stockholder, partners, members of associations or organizations registered with the Commission;
(b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders, members, or associates; between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively; and between such corporation, partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity; and
(c) Controversies in the election or appointments of directors, trustees, officers or managers of such corporations, partnerships or associations.
Primary Purpose Clause
Tim Tinio, an investment banker, obtained from his local and international clients the mandate to organize and establish a corporation which shall be engaged in the businesses of constructing, operating, and maintaining a nation-wide chain of hotels/resorts in the country. Propose a corporate name which can be used by Tim and draft the primary purpose clause of the corporation. (midterms, 2s, 07-08)
Primary Purpose Clause; Corporate Powers; Ultra Vires Acts
The “primary purpose clause” of a corporation delineates and limits the exercise by the corporation of corporate authority as provided under the Code. (Midterms, 2s, 07-08) (Sec14: Contents of AOI; Section 36: Corporate Powers and Capacity; Section 45: Ultra Vire Acts)
The primary purpose clause contained in the Articles of Incorporation limits the exercise by the corporation of its powers and authority under the secondary purpose clauses (m.1s.08-09). (Section 14: contents of AOI; sir: secondary purposes are exercised in the furtherance and pursuit of the primary purpose…)
Bakboy Co. Inc (BCI), a corporation engaged in the business of raising livestock, operate an agro-industrial facility for the breeding and sale of cattle and pigs. BCI received offers for a possible sale to BCI of the following businesses, namely: (1) meat and processing facilities and (2) state-of-the-art slaughterhouses facilities owned by Karnehan Co. and Kalayan, Inc. respectively. Assuming you are a distinguished member of the board of directors of BCI, will you be in a position to justify the acquisition of such businesses.(Midterms, 2s, 07-08) (Section 14; Section 36; Section 45)
After a few more years of operations, the culinary delicacies of the Company attracted hordes of satisfied customers. At the same time, the experts received continuing offers from third parties soliciting the interest of the company to invest in: (1) a raw material commissary/cold storage business and (2) a chain of retail establishments, both business being conducted thru existing corporations.
a. Does the Company have the authority to acquire or invest in the aforementioned businesses?
Parent-Subsidiary
A “parent corporation” inevitably participates directly in the control, management, and supervision of the business of the subsidiary (Sec23: who controls the corporation; Garnett vs. Southern Railway: ownership of stock alone is not automatically an indicia that corp is a parent corporation; Jardine Davies vs. JRB Realty Inc: Control determines if parent. (Midterms, 2s, 07-08)
Stockholders of a parent corporation are not in a position to exercise control and management over the corporate affairs of the subsidiary. (m.1s.97-98)
Under a “parent-subsidiary” corporate relationship, the parent company inevitably exercises control and management over the subsidiary. (.1s.06-07) (m.1s.08-09)(if parent company owns stocks in subsidiary company, then exercises voting rights in the subsidiary company, then it would inevitably exercise control and management) (Sections 23, 24, 6)
A parent corporation exercises control and management of the businesses pursued by it subsidiaries. (m.2s.08-09)
The doctrine of piercing the corporate veil would not have been applied by SC in the case of Koppel vs. Yatco, provided….the domestic corporation directly sold the “train-related products” to the end-users locally…(m.2.08-09) (highlight element of control)
Liability
The corporation and its stockholders may be solidarily liable for the obligations of the corporation (Midterms, 2s, 07-08) (Section 21: Corporation by Estoppel; Piercing corporate veil)
The direct assumption by a SH of the obligations of a corporation negates the separate and distinct personalities of both parties (m.2s.08-09)
Liability; De Facto Corporation
The stockholders of a de facto corporation may be held personally liable for corporate acts in the event quo warranto proceedings are instituted for the purpose of impugning the existence of corporation. (m.1s.97-98)
Incorporator-subscriber of a corporation in the process of incorporation are subsidiarily liable for the obligations of such corporation vis a vis third parties. (m.1s.97-98)
The corporate existence of de facto corporations has a limited term. (m.1s.08-09) (Section 11: Term of corps 50 years max; Section 20: def, end in quo warranto proceedings instituted by OSG – if ruled against corp, corp’s existence would terminate as, Sec2: it is created by law, may be ended by law)
Estate Planning
Pala Sugad, a compulsive gambler, finally hit the jackpot. In a single day, his aggregate winnings from the casinos, horseracs, cockfights and lotto draw amounted to P1B. With his winnings, Pala accumulated choice property and assets. Realizing that his earthly sojourn was going to end soon owing to his lifestyle, Pala wanted to ensure that his largesse would eventually be enjoyed by his designated beneficiaries. A close “gambling buddy” suggested that Pala organize and incorporate a corporate entity which will be used as the vehicle for distribution. Would the suggestion given to Pala have any legal basis Explain your answer briefly. Assuming that the said suggestion is legally feasible, how can the beneficiaries of Pala enjoy what is accruing in their favor? Discuss your answers. (m, 1s.97-98)
Jurisprudence has confirmed the use of a corporate entity as a vehicle for implementing estate planning. Briefly discuss the underlying reasons which justify the aforementioned use. Does such use ensure the full implementation of the desires/wishes of the testator? (m.1s.09-10)
The cases of FL Ceases, Marvel Bldg, and Delpher Trade explain the use of corporations as “vehicles’ for estate planning.
a. With such a corporation, will there be a need for the beneficial owner-testator to execute a will to distribute the latter’s estate?
b. What measures have to be implemented by the beneficial owner-testator to ensure the distribution of the latter’s estate to the proper parties?
c. Would the designated heirs have the option of receiving money or property/assets as their share in the estate?
Pre-emptive Right
Section 39 of the Code grants stockholders the right to subscribe to all issuances of stock by the corporation. However, such right can be denied, with the conformity of a 2/3 vote of the stockholders. What would be the justifications which would support the denial of such right? (Finals, 1s,08-09) (Section 39, Corpo Code)
The denial of pre-emptive right to subscribe to any issuance by the corporation of the additional shares of stock is inimical to the proprietary interests of its existing stockholders. (f.1s.07-08) (Section 39)
Pre-emptive Right; Preferential Right
A provision in the by-laws of a corporation requiring a disposing stockholder to offer the latter’s shares of stock to the corporation prior to any disposition may be upheld and favorably considered by the Courts provided…the corporation will be required to exercise the right to purchase the shares w/n a definite period of time (Finals, 1s,08-09) (Fleishcer vs. Botica Nolasco)
Right of first refusal
As explained by the SC in several cases, stockholders of a corporation may grant a continuing and reciprocal “right of first refusal” w/ respect to the shares of stock registered in the respective names of the contracting stockholders. Briefly discuss and explain the obligations and proscriptions arising from such arrangements. (Midterms, 2s, 07-08)
As explained by the SC in several cases, stockholders of a corporation may grant a continuing and reciprocal “right of first refusal” w/ respect to the shares of stock registered in the respective names of the contracting stockholders. Distinguish such arrangements from the “pre-emptive right” to subscribe to additional shares vested in favor of stockholders under Section 39 of the code. (Midterms, 2s, 07-08) (Fleischer vs. Botica Nolasco)
A “right of first refusal” granted in favor of a stockholder ensures the latter of maintaining control and management of the corporation. (Fleischer vs. Botica Nolasco) (perfect score: right of first refusal – right of existing SH to purchase stocks of registered SH who wants to dispose the same to the public)
Financing the corporation
Batong Buhay Inc, a corporation engaged in the business of mining (BBI), contemplates to expand its operations through; (1) the acquisition of additional mining claims owned by Ms. Mia Minera (MM) and (2) the issuance of additional shares of stock. To date, the authorized capital stock of BBI is 500M, divided into 5M CS, with a par value of P100.share, all of which have been subscribed to and are owned equally by Ms. Ganan Sia (GS) and her 4 children. Assuming the mining claims of MM are valued at P3B, what would be the extent of; (1) the increase in the ACS of BBi and (2) the additional subscription and payments that will be made to implement said increase? (f.1s.07-08)
Financing the corporation; creditors; rights
Creditors of a corporation may participate in the management and control of the corporation, inclusive of the use and disposition of corporate assets. (m.1s.06-07) (Indirect: 1. As SH: Sec62: previously incurred debt as consideration for shares; so can be SH; DBP vs. Pioneer, Augusta Trust vs. Augusta; 2. As BOD mem, Sec23: at least 1 stock owned, BOD control corp; 2. Direct: provisions in the loan)
Consideration for shares; previous indebtedness
A secured creditor who subsequently agrees to convert the loan of the corporation to equity assumes greater risks than the other creditors of the corporation. (m.2s.08-09) (Augusta Trust vs. Augusta; preference of credits)
Consideration for Shares
Bakboy Co. Inc (BCI), a corporation engaged in the business of raising livestock, operate an agro-industrial facility for the breeding and sale of cattle and pigs. BCI received offers for a possible sale to BCI of the following businesses, namely: (1) meat and processing facilities and (2) state-of-the-art slaughterhouses facilities owned by Karnehan Co. and Kalayan, Inc. respectively. Will you favorably endorse the purchase by BCI of (1) the outstanding shares of stock of the 2 aforementioned corporate entities or (2) the property and assets of such corporations (Midterms, 2s, 07-08) (Yu vs. NLRC)
Investors who contemplate to acquire an existing and on-going business owned by a corporation have the option to purchase (1) all the property and assets comprising such business or (2) 100% of the outstanding shares of the corporation. A. Will the exercise of both options require the assumption by the investors of obligations and liabilities of the business and the corporation respectively? (b) Which of the options appear to be more beneficial and advantageous to the investor? (m.2s.08-09) (Yu vs. NLRC)
Dina Makakita and Kenneth Sy owned 40% and 20% respectively of the outstanding shares of capital stock of Cine Vision, Inc. the largest producer of local films and videos. As a result of their expertise and perseverance, Dina and Kenneth managed to expand the business of CVI. With the revenues generated by CVI, the corporation had sufficient funds to acquire cinemahouses and theaters for the exhibition of the films of CVI. As counsel of Dina, Kenneth and CVI, would you recommend that: (1) the aforestated cinemahouses be acquired by CVI; (2) CVI organize a wholly-owned subsidiary which will own and operate such cinemahouses Explain your opinion. (m.1s.97-98)
Consideration for shares; pre-incorporation
Prior to the issuance by the SEC of the certificate of registration, the incorporator-subscribers of the corporation would have the right to withdraw their capital contributions. (m.1s.97-98) (Section 61)
The commitment of an incorporator/stockholder to subscribe to the capital stock of a corporation in the process of incorporation is unconditional (m.2s.08-09) (Sec61: GR: irrevocable for 6 months fr. Date of subscription X: all other subscribers consent or incorp fails; X to X: if already w/ SEC)
Consideration for Shares Full Payment; Benefits
Explain the advantages accruing to a stockholder who has made full payment for the latter’s subscription to the shares of stock of a corporation (Finals, 1s,08-09)
Consideration for Shares Full Payment; Benefits; proprietary rights
Stockhlders who have not fully paid, and who paid in full, their subscriptions to the shares of stock of a corporation, respectively, exercise and enjoy the same proprietary rights. (Malabo
Consideration of Shares; 3P; Benefit to the corporation; Benefit to Shareholder
The purchase of outstanding and issued shares of stock of a corporation by a third party from a stockholder does not redound to the benefit of the corporation. (Finals, 2s, 06-07)
The business of PC proved to be extremely lucrative to PC and MD. Owing to the annual revenues realied by PC, Mr. Herbo Laryo (HL), the controlling stockholder of Botica ng Bayan, Inc., the largest drugstore chain in the Country (BBI), offered PP and MD the opportunity to acquire 50% equity interest in BBI. HL disclosed to PP and MD that the unissued and unsubscribed shares of stock of BBI will be earmarked for the subscription of PC, PP, and MD (or the designated party). Would the acceptance of the aforementioned offer redound to the benefit of PC, PP, and MD, respectively? What actions should be implemented to complete said subscription? (Finals, 2s, 06-07)
Payment by a stockholder of the amount due for the latter’s subscription to the shares of capital stock of the corporation redounds to the benefit of the corporation and the other stockholders. (M.1s.08-09) (Corp: directly – increase in subscription ~ increase in pool of assets ~ more resources for financing the corporation; SH indirectly: increase in subscription ~ less liability ~ increase in the value of the investment)
Rights; preferred Shareholders
Holders of preferred cumulative (7% per annum) and mandatorily redeemable shares of stock (redeemable by the issuing corporation) are vested with the same rights accruing in favor of unsecured creditors. (f.1.07-08) (Section 6; Jordan Co. vs. Allen)
Rights; Proprietary Rights; Shareholders; Assets and Property of Corporation; Transfer
Nana Langin appears as the stockholder of record of 60% of the authorized capital stock of Biyaya Corp. Nana executed a Deed of Assignment in favor of her 6 nieces, pro-indiviso, for the latter’s shares of stock covered by a single stock certificate. Both documents (the stock certificate was indorsed by Nana) were surrendered by Nana to the Corporate Secretary. With the execution of the aforestated documents, can the nieces of Nana assert proprietary rights over the shares of stock of Nana? (Finals, 1s,08-09)
The expectancy and inchoate rights of a stockholder in the property and assets of a corporation may not be realized by such stockholder. (Midterms, 2s, 07-08)
Chino Teopaco (CT), the largest stockholder of Telecom Technologies, Co. (TELCO), executed a will designat6ing his only surviving relative, Pablo Job PJ) as sole beneficiary of CT’s property and assets, including the later’s shares in Telco. Such testamentary disposition was not disclosed to PJ. Upon te demise of CT, does PJ have a vested right to (1) the Telco shares; (2) the property and assets of Telco; respectively? (M, 2s, 07-08) (Estate planning cases…)
Rights; Proprietary Rights; Shareholders; Assets and Property of Corporation
The use and disposition of the property and assets of a corporation directly affects the interests of the stockholders. (Midterms, 2s, 07-08)
The extent of the ownership of a stockholder in the property and assets of the corporation is determined by the aggregate value of the shares of stock registered in the name of the stockholder. (m.1s.06-07) (Heirs of Guanzon case, Magsaysay case, Section 2: definition of a corporation – artificial entity separate identity to stock owners…)
Ownership of shares of stock of a corporation does NOT vest in favor of the stockholder any right or interest in the property and assets of the corporation (m.1s.08-09) (Inchoate right: Magsaysay, Heirs of Guanzon)
Rights; Proprietary Rights; Shareholders; Dissolution; Co-ownership
Upon dissolution, and after settlement of the obligations of the corporation, the remaining property and assets of the corporation shall be co-owned by the stockholders prior to subsequent distribution of the same. (Finals, 2s, 06-07; M.1s.08-09) (Sec2: corp defined; Heirs of Guanzon Case)
The dissolution of a corporation results in the return of the investments made by its stockholders. (m.1s.08-09)
Rights; Proprietary Rights; Shareholders; Dividends; Transfer
Nana Langin appears as the stockholder of record of 60% of the authorized capital stock of Biyaya Corp. Nana executed a Deed of Assignment in favor of her 6 nieces, pro-indiviso, for the latter’s shares of stock covered by a single stock certificate. Both documents (the stock certificate was indorsed by Nana) were surrendered by Nana to the Corporate Secretary. In the event dividends were declared by Biyaya Corp. prior to the conveyance by Nana of her shares of stock, would Nana have the right to receive such dividends? Would the conveyance by Nana of her original shares of stock to her nieces deem to include the said dividends? (Finals, 1s,08-09)
Rights; Management Rights; Shareholders
Not all the corporate acts referred to under Section 6 of the Code require the approval of all stockholders for validity. (m.1s.97-98)
Stockholders have the right to delineate the nature and extent of the powers and authority of the board of directors of the corporation. (m.1s.06-07) (Sec6: acts which all SH should vote at…including amendment and adaption of AOI and Bylaws; relate to stuff to be included in the AOI, Section 14, Section 17 on contents of AOI- when rejected)…
Rights; Management Rights; Shareholders; Transfer
Nana Langin appears as the stockholder of record of 60% of the authorized capital stock of Biyaya Corp. Nana executed a Deed of Assignment in favor of her 6 nieces, pro-indiviso, for the latter’s shares of stock covered by a single stock certificate. Both documents (the stock certificate was indorsed by Nana) were surrendered by Nana to the Corporate Secretary. Considering the shares conveyed to the nieces cover a controlling interest in Biyaya Corp. and will command a premium, how do you preserve and maintain such control and value among nieces? (Finals, 1s,08-09)
The business of PC proved to be extremely lucrative to PC and MD. Owing to the annual revenues realied by PC, Mr. Herbo Laryo (HL), the controlling stockholder of Botica ng Bayan, Inc., the largest drugstore chain in the Country (BBI), offered PP and MD the opportunity to acquire 50% equity interest in BBI. HL disclosed to PP and MD that the unissued and unsubscribed shares of stock of BBI will be earmarked for the subscription of PC, PP, and MD (or the designated party). After considering the opportunities arising from the offer of HL, PP and MD seek your learned counsel on the following points, namely: (1) who would you recommend as the appropriate party/ies who will subscribe to the shares of stock of BBI? (2) what will be the payment for such subscription and (3) with such investment, how will you ensure that PP and MD participate in the control and management of PC and BBI? (Finals, 2s, 06-07)
Rights; Transfer
The rights and title vested in favor of transferees of stock certificates indorsed in blank are not dependent on the rights and title of their immediate predecessors in interest (unknown date, mukhang finals) (Section 9, NIL: if indorsed in blank, payable to bearer; Section 34, NIL: Indorsement in blank specifies no indorsee…payable to bearer, negotiated by delivery; Section 63, CC; Sta Maria vs. HKSB)
Transferees of shares of stock are not automatically vested with the proprietary rights inherent in the ownership of such shares. (f.1.07-08) (Section 63…)
Any sale or transfer of more than a majority of the outstanding capital stock of a corporation may directly affect the corporation as an on-going business concern and its stockholders. (m.1s.08-09) (change in majority ownership ~ change in control; Majority SH – control over BOD – control over corp; Sec24: majority mems entitled to vote – if receive highest # of votes, wins as Director, may affect the on going concern status by affecting policies of the corp – Section 23)
The disposition by a majority stockholder of the later’s shares in the corporation will not affect the on-going business of the corporation (m.2s.08-09) (see above, plus Abejo vs. dela Cruz)
Rights; Management Rights; Proprietary Rights; Shareholders; Extent
The extent of the amount of investment of a stockholder determines the latter’s participation in (i) the control and management of the corporation; (ii) the profits realized from such investment (Finals, 2s, 06-07)
Closed Corporation; Management Rights; Shareholders; Liability
Stockholders of a “closed corporation” under the Code, who directly participate in the control and management of the corporation, are solidarily liable for the obligations of the corporation. (Midterms, 2s, 06-07) (Sec96: Definition; Section 97: AOI of closed corp may even provide for SH to be managers; Section 26: BOD control exclusively corp; note: always put the rationale behind close corp)
Stockholders of a closed corporatin who participate in the management of the corporation assume personal liability. (m.1s.08-09) (Section 96: Def; Section 2: def. of a corp – has separate existence from SH/BOD so GR: not liable; X: Section 100.5: only for corporate torts + actively engaged)
Consideration for Shares; Property; Corporate Actions; Control and Management
Sagasa Transp. Corp. (STC), a corporation engaged in the operation of a fleet of taxis had the immediate need to upgrade its vehicles. Although the business of STC generated revenues, the Corporation did not have sufficient capital to pay for the vehicles it wanted to acquire. Mando Rugas, an importer of reconditioned vehicles, confirmed his interest in investing in STC. Mando agreed to convey 60 Coronas for P30M worth of shares, under a swap arrangement. What corporate actions have to be implemented by STC for the purpose of acquiring the vehicles of Mando? (Finals, unknown date) (Section 62; Section 39)
Sagasa Transp. Corp. (STC), a corporation engaged in the operation of a fleet of taxis had the immediate need to upgrade its vehicles. Although the business of STC generated revenues, the Corporation did not have sufficient capital to pay for the vehicles it wanted to acquire. Mando Rugas, an importer of reconditioned vehicles, confirmed his interest in investing in STC. Mando agreed to convey 60 Coronas for P30M worth of shares, under a swap arrangement. In the event of STC holds in abeyance the issuance of the shares of stock in favor of Mando, does the latter have the right to institute the appropriate action before the SEC to compel the issuance of his stock certificate? (Finals, Unknown date) (SEC Jurisdiction; Abejo vs. CA)
No samplex, but there’s answers…topics:
Indorsement/Transfer of shares: Section 63
Director Requirement: Section 23 – at least 1 share of stock
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