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 is enjoyed in proportion to their existing shareholdings, allowing them to maintain their relative ownership percentage. This preemptive right can only be successfully denied if it is explicitly stated in the articles of incorporation or an amendment thereto. However, even if not denied in the articles, this right does not extend to shares issued in compliance with laws requiring public stock offerings or shares issued in good faith for property or contracted debt, provided it is approved by two-thirds (2/3) of the outstanding capital stock.
02 November 2025
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