RA 11232 - Capital Structure

Question 1

o Subscription agreement
* Nature of contract of subscription:

▪ Contract of subscription is an indivisible contract.
▪ Contract of subscription is a consensual contract.
▪ Contract of subscription is not covered by statute of fraud.

Answer 1

Notes only

Question 2

o Subscription agreement
* Types of subscription contract:

▪ Pre-incorporation subscription:
**Period of irrevocability - It is irrevocable for a period of 6 months from the date of subscription and after its submission to SEC.
* *Period for cancellation - It may be revoked after 6 months from the date of subscription but it must be made before its submission
to SEC.

▪ Post-incorporation subscription: It may not be revoked unless there is unrestricted retained earnings to support its retirement in order not
to violate trust fund doctrine.

Answer 2

Notes

Question 3

• Requirements for issuance of certificate of stock

Answer 3

▪ They must be fully paid.

Question 4

• Delinquency of shares
• Moment of delinquency of shares:

▪ Subscription contract with stated maturity date ➢ Upon lapsing of 30 days from the maturity date stated in the contract.

▪ Subscription contract without stated maturity date ➢ Upon lapsing of 30 days from the date of payment as stated in the call of Board of Directors for payment.

Question 5

• Delinquency of shares

▪ Effect to rights of subscribers for delinquency shares?

Answer 5

▪ The rights of delinquent shares are suspended except right to cash and stock dividends.

Question 6

• Delinquency of shares

▪ Remedies of corporation for delinquent shares?

Answer 6

▪ Civil action by filing before a regular court an action to collect a sum of money.

▪ Sale of delinquent shares
➢ To highest bidder.
➢ Acquisition by corporation and placing them to treasury.
➢ Period fixed by law for the sale of delinquent shares. - Not less than 30 days nor more than 60 days from the date the stocks become delinquent.