Name two types of consideration that are explicitly prohibited for the issuance of shares of stock.
Stocks shall not be issued for a consideration less than their par or issued price, a principle known as prohibiting “watered stock” (SEC. 61, Revised Corporation Code of the Philippines). The Code then explicitly prohibits the issuance of shares of stock in exchange for promissory notes. It also prohibits the issuance of shares in exchange for future service to be rendered to the corporation. However, consideration may include actual cash, tangible or intangible property, labor performed, or amounts transferred from unrestricted retained earnings to stated capital.
02 November 2025
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