Where must restrictions on the transfer of shares in a close corporation appear to be binding on a purchaser in good faith? Restrictions on the right to transfer shares in a close corporation must appear in three mandatory locations to be binding on any purchaser in good faith (SEC. 97, Revised Corporation Code of the […]
What legal mechanism is required for a restriction on share transfer in a close corporation to avoid being considered overly burdensome? The restrictions imposed on share transfer in a close corporation shall not be more onerous than granting the existing stockholders or the corporation the option to purchase the shares of the transferring stockholder (SEC.
What are the consequences if stock in a close corporation is issued or transferred in breach of a qualifying condition stated conspicuously on the certificate? If a stock is issued or transferred in breach of a conspicuously stated qualifying condition, the transferee is conclusively presumed to have notice of the fact of the ineligibility to
What agreement provision relating to corporate affairs is permitted among stockholders of a close corporation that would normally be restricted? A written agreement among some or all of the stockholders in a close corporation is explicitly permitted to relate to the conduct of the business and affairs of the corporation (SEC. 99, Revised Corporation Code
Under what condition is a board meeting in a close corporation considered unnecessary or improperly held but still deemed valid? Unless the bylaws provide otherwise, any action taken by the directors of a close corporation without a meeting called properly and with due notice shall nevertheless be deemed valid under four specific conditions (SEC. 100,
What is the extent of the preemptive right of stockholders in a close corporation? The preemptive right of stockholders in a close corporation is broader than in an ordinary stock corporation (SEC. 101, Revised Corporation Code of the Philippines). In a close corporation, this right shall extend to all stock to be issued, including the
What is the extent of the preemptive right of stockholders in a close corporation? Read More »
What is the required supermajority vote to amend the articles of incorporation of a close corporation when deleting certain provisions? Any amendment to the articles of incorporation that seeks to delete or remove any provision required by Title XII (Close Corporations), or to reduce a quorum or voting requirement previously stated in the articles, requires
What must occur before the SEC exercises its power to arbitrate a deadlock in a close corporation? The SEC’s power to arbitrate a deadlock can be invoked only if the directors or stockholders are so divided on the management of the corporation’s business and affairs that the votes required for a corporate action cannot be
What are the four remedial orders the SEC may issue when arbitrating a close corporation deadlock? When arbitrating a deadlock, the SEC has broad authority to make appropriate orders to resolve the dispute (SEC. 103, Revised Corporation Code of the Philippines). The SEC may order the cancellation or alteration of any provision contained in the
What financial condition must be met before a certificate of stock can be issued to a subscriber? No certificate of stock shall be issued to a subscriber until the full amount of the subscription has been paid (SEC. 63, Revised Corporation Code of the Philippines). In addition to the principal subscription amount, any interest and
