Finals Codals Flashcards
When may the right of appraisal be exercised?
a) In case an amendment to the articles of incorporation has the effect of changing or
restricting the rights of any stockholder or class of shares, or of authorizing preferences in any respect superior to those of outstanding shares of any class, or of extending or shortening the term
of corporate existence;
b) In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or
substantially all of the corporate property and assets as provided in this Code;
c) In case of merger or consolidation;
d) In case of investment or corporate funds for any purpose, other than the primary purpose of the Corporation.
What is an appraisal right?
The right of a shareholder to dissent and demand payment of the fair value of his shares in the instances provided for under the RCCP.
Which shares are covered in the exercise of appraisal right?
All the “shares” held by the shareholder
What is the remedy if the corporation refuses to pay the appraisal right?
the aggrieved stakeholder may file the appropriate action before the RTC to compel the corporation to allow him to exercise his appraisal right
When does the right to payment of appraisal fee ceases? (Art 83)
1) where the demand for payment is withdrawn with the consent of the corporation
2) if the proposed corporate action is abandoned or rescinded by the corporation
3) if the proposed corporate action is disapproved by the SEC where approval is necessary
4) If the SEC determines that such stockholder is not entitled to the appraisal right
5) failure to make the demand within 30-day period provided for in Section 81
6) the shares are transferred by the dissenting shareholders and;
7) the dissenting shareholder failed to submit the stock certificates within 10 days from his written demand for payment of the value of his shares
What is a non-stock corporation?
a nonstock corporation is one where no part of its income is distributable as dividends to its
members, trustees, or officers: Provided, That any profit which a nonstock corporation may obtain
incidental to its operations shall, whenever necessary or proper, be used for the furtherance of the
purpose or purposes for which the corporation was organized, subject to the provisions of this
Title.
Is membership to a non-stock corporation transferrable?
SEC. 89. Nontransferability of Membership. – Membership in a nonstock corporation and
all rights arising therefrom are personal and non-transferable, unless the articles of incorporation
or the bylaws otherwise provide.
How is membership to a non-stock corporation terminated?
SEC. 90. Termination of Membership. – Membership shall be terminated in the manner
and for the causes provided in the articles of incorporation or the bylaws. Termination of
membership shall extinguish all rights of a member in the corporation or in its property, unless
otherwise provided in the articles of incorporation or the bylaws.
How many trustees are allowed in a non-stock corporation?
SEC. 91. Election and Term of Trustees. – The number of trustees shall be fixed in the
articles of incorporation or bylaws which may or may not be more than fifteen (15).
What are the qualifications of a trustee in a non-stock corporation?
THe only qualification of a trustee under Section 91 is membership in the corporation
Where may non-stock corporations hold their meetings?
Sec 92. The bylaws may provide that the members of a nonstock corporation may hold their regular or special meetings at any place even outside the place where the principal office of the corporation is located: Provided, That proper notice is sent to all members indicating the
date, time and place of the meeting: Provided, further, That the place of meeting shall be within
Philippine territory
How is a vacancy in the BOT filled?
trustees may fill vacancies in the board provided that those remaining still constitute a quorum in accordance with Section 28 of the RCCP
What are the rules of distribution of assets in a non-stock corporation?
SEC. 93. Rules of Distribution. – The assets of a nonstock corporation undergoing the
process of dissolution for reasons other than those set forth in Section 139 of this Code, shall be
applied and distributed as follows:
(a) All liabilities and obligations of the corporation shall be paid, satisfied and discharged,
or adequate provision shall be made therefor;
(b) Assets held by the corporation upon a condition requiring return, transfer or conveyance,
and which condition occurs by reason of the dissolution, shall be returned, transferred or conveyed
in accordance with such requirements;
(c) Assets received and held by the corporation subject to limitations permitting their use
only for charitable, religious, benevolent, educational or similar purposes, but not held upon a
condition requiring return, transfer or conveyance by reason of the dissolution, shall be transferred
or conveyed to one (1) or more corporations, societies or organizations engaged in activities in the
Philippines substantially similar to those of the dissolving corporation according to a plan of
distribution adopted pursuant to this Chapter;
(d) Assets other than those mentioned in the preceding paragraphs, if any, shall be
distributed in accordance with the provisions of the articles of incorporation or the bylaws, to the
extent that the articles of incorporation or the bylaws determine the distributive rights of members,
or any class or classes of members, or provide for distribution; and
(e) In any other case, assets may be distributed to such persons, societies, organizations or
corporations, whether or not organized for profit, as may be specified in a plan of distribution
adopted pursuant to this Chapter.
What is a close corporation?
Sec 95. A close corporation, within the meaning
of this Code, is one whose articles of incorporation provides that: (a) 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); (b) all the issued stock of all classes shall
be subject to one or more specified restrictions on transfer permitted by this Title; and (c) the
corporation shall not list in any stock exchange or make any public offering of its stocks of any
class
Distinguish a close corporation from an ordinary corporation
How is preemptive right exercised in a close corporation?
SEC. 101. Preemptive Right in Close Corporations. – The preemptive right of stockholders
in close corporations shall extend to all stock to be issued, including reissuance of treasury shares,
whether for money, property or personal services, or in payment of corporate debts, unless the
articles of incorporation provide otherwise.
What is the rule in the event of a deadlock on closed corporations?
SEC. 103. Deadlocks. – Notwithstanding any contrary provision in the close corporation’s
articles of incorporation, bylaws, or stockholders’ agreement, if the directors or stockholders are
so divided on the management of the corporation’s business and affairs that the votes required for
a corporate action cannot be obtained, with the consequence that the business and affairs of the
corporation can no longer be conducted to the advantage of the stockholders generally, the
Commission, upon written petition by any stockholder, shall have the power to arbitrate the
dispute
How many members of the BOT are allowed for Educational Corporations?
SEC. 106. Board of Trustees. –Trustees of educational institutions organized as nonstock corporations shall not be less than five (5) nor more than fifteen (15): Provided, That the number of trustees shall be in multiples of five (5).
