What are the initial two steps required for the distribution of assets during the dissolution of a nonstock corporation? The distribution process begins by mandating that all liabilities and obligations of the corporation shall be paid, satisfied, and discharged, or adequate provision shall be made for these obligations (SEC. 93, Revised Corporation Code of the […]
How are assets received for specific purposes (charitable, religious) but not subject to return distributed upon nonstock dissolution? Assets received and held by the corporation subject to limitations permitting their use only for charitable, religious, benevolent, educational, or similar purposes, but not held upon a condition requiring return, must be transferred to specific similar organizations
What three provisions must the articles of incorporation of a close corporation contain regarding its stock? A close corporation is defined as one whose articles of incorporation provide three specific restrictions regarding its issued stock (SEC. 95, Revised Corporation Code of the Philippines). First, all the corporation’s issued stock of all classes, exclusive of treasury
What are the four types of entities that are prohibited from being incorporated as a close corporation. Although any corporation may generally be incorporated as a close corporation, several specific types of entities are explicitly excluded (SEC. 95, Revised Corporation Code of the Philippines). These prohibitions apply to mining or oil companies and stock exchanges.
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 fundamental definition of a nonstock corporation regarding its income? For the purposes of this Code, a nonstock corporation is fundamentally defined as one where no part of its income is distributable as dividends to its members, trustees, or officers (SEC. 86, Revised Corporation Code of the Philippines). This principle remains true even
What is the fundamental definition of a nonstock corporation regarding its income? Read More »
