When consideration for stocks is other than cash, who determines the valuation, and whose approval is required?
Where the consideration for the issuance of stock is something other than actual cash, such as property, or consists of intangible property like patents or copyrights, the initial valuation thereof is determined by the stockholders or the board of directors (SEC. 61, Revised Corporation Code of the Philippines). This initial determination, however, is subject to the subsequent approval of the SEC. This oversight mechanism ensures that non-cash assets are assigned a fair value equal to the par or issued value of the stock, thereby preventing the issuance of watered stock. The property must also be necessary or convenient for the corporation’s use and lawful purposes.
02 November 2025
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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/.
