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 shares, shall be held of record by not more than a specified number of persons, not exceeding twenty (20). Second, all the issued stock of all classes shall be subject to one or more specified restrictions on transfer permitted by this Title. Third, the corporation shall not list in any stock exchange or make any public offering of its stocks of any class. If two-thirds (2/3) of its voting stock is owned or controlled by a corporation that is not a close corporation, the entity is disqualified from being a close corporation.
02 November 2025
About Nicolas and De Vega Law Offices
Nicolas and De Vega Law Offices is a full-service law firm in the Philippines. You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines. You may also call us at +632 84706126, +632 84706130, +632 84016392 or e-mail us at [email protected]. Visit our website https://ndvlaw.com/.
