corporate law

What is the rule concerning the irrevocability of a pre-incorporation subscription?

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What is the rule concerning the irrevocability of a pre-incorporation subscription? A subscription of shares in a corporation still to be formed, known as a pre-incorporation subscription, shall be irrevocable for a period of at least six (6) months from the date of subscription (SEC. 60, Revised Corporation Code of the Philippines). This irrevocability applies […]

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What is the restriction on donations made by foreign corporations in the Philippines?

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What is the restriction on donations made by foreign corporations in the Philippines? Every corporation has the general power and capacity to make reasonable donations for the public welfare or for charitable, scientific, civic, or similar purposes (SEC. 35, Revised Corporation Code of the Philippines). However, this power is explicitly restricted for foreign corporations doing

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What are the requirements and voting threshold for a private corporation to extend or shorten its corporate term?

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What are the requirements and voting threshold for a private corporation to extend or shorten its corporate term? A private corporation may extend or shorten its term as stated in the articles of incorporation only when the action is approved by a majority vote of the board of directors or trustees (SEC. 36, Revised Corporation

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What are the requirements and vote for a corporation to increase or decrease its capital stock?

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What are the requirements and vote for a corporation to increase or decrease its capital stock? Any action to increase or decrease the capital stock or to incur, create, or increase any bonded indebtedness must be approved by a majority vote of the board of directors (SEC. 37, Revised Corporation Code of the Philippines). This

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What sworn statement regarding payment must accompany a certificate of increase of capital stock?

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What sworn statement regarding payment must accompany a certificate of increase of capital stock? For the SEC to accept for filing any certificate of increase of capital stock, it must be accompanied by a sworn statement of the treasurer of the corporation (SEC. 37, Revised Corporation Code of the Philippines). This statement must explicitly show

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What rights must be protected when a corporation seeks approval to decrease its capital stock?

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What rights must be protected when a corporation seeks approval to decrease its capital stock? Before approving a capital stock decrease, the SEC must ensure that its effect shall not prejudice the rights of corporate creditors (SEC. 37, Revised Corporation Code of the Philippines). This safeguard prioritizes the claims of external creditors over the interests

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What is the general rule regarding the preemptive right of stockholders, and how can it be denied?

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What is the general rule regarding the preemptive right of stockholders, and how can it be denied? The general rule dictates that all stockholders of a stock corporation shall enjoy the preemptive right to subscribe to all issues or disposition of shares of any class (SEC. 38, Revised Corporation Code of the Philippines). This right

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When is a sale or disposition of corporate assets considered to cover “substantially all” of the corporate property?

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When is a sale or disposition of corporate assets considered to cover “substantially all” of the corporate property? A sale or other disposition is deemed to cover substantially all the corporate property and assets if, by that action, the corporation would be rendered incapable of continuing the business or accomplishing the purpose for which it

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What right is accorded to a stockholder who dissents from the sale or disposition of substantially all corporate assets?

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What right is accorded to a stockholder who dissents from the sale or disposition of substantially all corporate assets? A stockholder who dissents from the resolution approving the sale or disposition of substantially all corporate assets is granted the right of appraisal (SEC. 39, Revised Corporation Code of the Philippines). This allows the dissenting stockholder

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What financial requirement must be met before a stock corporation can acquire its own shares (other than redeemable shares)?

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What financial requirement must be met before a stock corporation can acquire its own shares (other than redeemable shares)? A stock corporation has the power to purchase or acquire its own shares for a legitimate corporate purpose, provided that the corporation has unrestricted retained earnings in its books to cover the shares to be purchased

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