Corporation Law

Question 1

Doctrine of Relations

Answer 1

when the delay in effecting or filing the amended articles of incorporation for the extension of corporate term is due to an insuperable interference occurring without the corporation’s intervention which could have not been prevented by prudence, diligence, and care, the same will be treated as having been effected before the expiration of the original term of the corporation

Question 2

Pre-emptive right

Answer 2

All stockholders of a stock corporation shall enjoy pre-emptive right to subscribe to all issues or dispositions of shares of any class, in proportion to their respective shareholdings

DENIAL: unless denied by the articles of incorporation or an amendment thereto

Question 3

…PRE-EMPTIVE RIGHT

Answer 3

the general rule is that pre-emptive right is recognized only with respect to new issues of shares, and not with respect to additional issues of originally authorized shares.

Question 4

Nell Doctrine

Answer 4

when one corporation sells or otherwise transfers all of its assets to another corporation, the latter is not liable for the debts and liabilities of the transferor

Question 5

Nell Doctrine: exceptions

Answer 5

1. where the purchaser expressly or impliedly agrees to assume such debts;
2. where the transaction amounts to a consolidation or merger of the corporations;
3. where the purchasing corporation is merely a continuation of the selling corporation; and
4. where the transaction is entered into fraudulently in order to escape liability for such debts

Question 6

Derivative Suit

Answer 6

an action brought by minority shareholders in the name of the corporation to redress wrongs committed against it, for which the directors refuse to sue

Question 7

Right of Appraisal

Answer 7

the right of a stockholder who dissents from certain corporate actions to demand payment of the fair value of his or her shares.

Question 8

Pre-emptive right- when not available

Answer 8

1. when the right is denied in the AI
2. In compliance with laws requiring stock offerings or minimum stock ownership by the public
3. when shares are issued in good faith with the approval of the stockholders representing 2/3 of the OCS, in exchange for property need for corporate purposes or in payment of a previously contracted debt.

Question 9

Doctrine of Indivisibility of Subscription Contract

Answer 9

No certificate of stock shall be issued to a subscriber until the full amount of his subscription together with interest and expenses (in case of delinquent shares), if any is due, has been paid

Question 10

Surrender of stock certificate - Anna Teng v SEC, G.R. No. 184332, 17 Feb. 2016

Answer 10

• The surrender of the certificate of stocks by the transferee to the corporation is not a requisite before Registration of the transfer may be made in the corporate books.
• but the surrender of the original certificate of stock is necessary before the issuance of a new one so that the old certificate may be cancelled

Question 11

may not incorporate as OPC

Answer 11

1. Banks and quasi-banks;
2. Pre-need, trust and insurance companies;
3. Public and publicly-listed corporation
4. Non-chartered GOCCs
5. A natural person who is licensed to exercise a profession for the purpose of exercising such profession except as otherwise provided under special laws