RA 11232 - Rights of a Stockholder Flashcards
o Doctrine of equality of shares means?
Doctrine of equality of shares means that all shares have equal rights except as provided in the Articles of Incorporation.
o Right to participation in management through voting:
✓ Entitlement to vote?
Entitlement to vote – As a general rule, all stocks are entitled to vote to except those which have limited voting rights because
they classified as non-voting in the Articles of Incorporation and therefore allowed to vote only on fundamental corporate acts.
o Right to participation in management through voting:
✓ Stocks which completely have no voting rights?
▪ Treasury shares
▪ Delinquent shares
▪ Fractional shares
▪ Escrow shares before the fulfillment of suspensive condition or arrival of suspensive period
o Right to participation in management through voting:
✓ How to vote?
▪ Personal voting by stockholders.
▪ Through an agent by virtue a proxy agreement
▪ Through a trustee in a voting trust agreement
*next card is related
o Right to participation in management through voting:
✓ How to vote?
▪ Personal voting by stockholders.
▪ Through an agent by virtue a proxy agreement
▪ Through a trustee in a voting trust agreement
- Define Proxy
- 5 Requirements of proxy for validity?
- Term of proxy?
➢ Proxy refers to a written authorization given by one person to another so that the second can act for the first. It also
refers to the agent or holder of authority or person authorized by an absent stockholder or member to vote for him at a stockholders’ meeting.
➢ Requirements of proxy for validity
▪ It shall be valid only for the meeting which is was intended unless classified as continuing proxy.
▪ It shall be in writing.
▪ It shall be filed before the scheduled meeting with the corporate secretary.
▪ It shall be signed by the shareholder/member concerned.
▪ It shall be valid and effective for a period of 5 years at any one time.
➢ Term of proxy
▪ A period not exceeding 5 years.
o Right to participation in management through voting:
✓ How to vote?
▪ Personal voting by stockholders.
▪ Through an agent by virtue a proxy agreement
▪ Through a trustee in a voting trust agreement
- What is voting trust?
- 4 Requirement of voting trust for validity?
- Term of voting trust?
Voting trust refers to the agreement whereby stockholders (trustors) of a stock corporation confers upon a trustee
the right to vote and other rights pertaining to the shares and it should not be used to circumvent the law against monopolies and illegal combinations in restraint of trade or for fraud purposes.
➢ Requirement of voting trust for validity
▪ It should be in writing.
▪ It should be notarized.
▪ It should be filed before the corporate secretary.
▪ It shall be valid and effective for a period of 5 years at any one time.
➢ Term of voting trust
▪ A period not exceeding 5 years.
▪ Differences between proxy and voting trust? 6
▪ Proxy need not be notarized while voting trust agreement must be notarized.
▪ There is no transfer of title to proxy while there is transfer of title to trustee.
▪ The proxy must vote in person while the trustee may vote in person or by proxy.
▪ Proxy can only act at a specified meeting if not continuing proxy while trustee is not limited to act at any particular
meeting.
▪ Proxy is revocable at any time while voting trust agreement is irrevocable.
▪ The proxy votes as an agent while the trustee votes as an owner.
▪ Voting by co-owners
▪ Unanimously
▪ Exceptional case when a co-owner may vote alone
➢ When the certificate of stock provides “and/or”
➢ When there is proxy or voting trust granted to a co-owner
Notes only
▪ Voting through remote communication or in absentia by stockholders or members in the election of directors or trustees.
▪ When so authorized in the by-laws or by a majority vote of the board of directors/trustees, the stockholders or members may also vote through remote communication or in absentia. Provided, that the right to vote through such modes may be exercised in corporations vested with public interest, notwithstanding the absence of a provision in the bylaws of such corporations. A stockholder or member who participates through remote communication or in absentia shall be deemed present for purposes of quorum.
Note only
