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 was incorporated (SEC. 39, Revised Corporation Code of the Philippines). This determination is computed based on the corporation’s net asset value as reflected in its latest financial statements. If the sale reaches this “substantially all” threshold, it must be authorized by the vote of stockholders representing at least two-thirds (2/3) of the outstanding capital stock. However, a sale necessary in the usual and regular course of business does not require stockholder authorization.
02 November 2025
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