Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

LAW2 > SECS 47-94 > Flashcards

SECS 47-94 Flashcards

1
Q

T/F: The certificate of stock must be signed by the president, countersigned by the secretary, and sealed with the seal of the corporation.

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are the three requirements of a Certificate of Stock?

A
  1. signed by the president
  2. countersigned by the secretary
  3. sealed with the seal of the corporation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Shares of stock may be transferred through ______ and _______.

A

Indorsement + Delivery

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

No transfer of stock, except as between the parties, shall be valid until the transfer is recorded in the ______________.

A

books of the corporation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

In order for the transfer of stock to be valid to TPs, it must be ____________.

A

REGISTERED in the books of the corporation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

T/F: No shares of stock against which the corporation holds any unpaid claim shall be transferable in the books of the corporation.

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

This doctrine holds that a subscription is one entire and indivisible whole contract; it cannot be divided into portions.

A

Doctrine of Individuality of Subscription

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Following the Doctrine of ______________, no certificate of stock shall be issued to a subscriber until the full amount of the subscription together with interest and expenses has been paid.

A

Individuality of Subscription

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are the 5 rights of the stockholder?

A
  1. Management rights
  2. Proprietary rights
  3. Remedial rights
  4. Appraisal rights
  5. Inspection rights
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Who are solidarily liable to the corporation or its creditors for consenting to the issuance of watered stock?

A
  1. director or officer

2. stockholder concerned

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are the 5 acts that will make the directors and stockholders solidarily liable for watered stocks?

A

According sa powerpoint:

  1. Consenting to the issuance of watered stock
  2. Less than the par value thereof
  3. Consideration other than cash
  4. Valued in excess of its fair value
  5. Has knowledge does not forthwith express his objection in writing
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are the remedies to enforce payment of stock subscription?

A
  1. Extra-judicial sale at public auction
  2. Judicial action
  3. Collection from cash dividends and withholding of stock dividends
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

T/F: Subscribers to stocks shall be liable to the corporation for interest on selected unpaid subscriptions.

A

False. Subscriber is liable for interest in ALL of its unpaid subscriptions.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

When is the stock considered delinquent?

A

A stock becomes delinquent upon failure of the holder to pay the unpaid subscription or balance thereof within 30 days from the date specified in the contract of subscription or on the date stated in the call.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What are the effects of becoming delinquent stocks?

A
  1. all rights are suspended

2. still entitled to dividends

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Voting in case of joint ownership of stock

A

GR - consent of all co-owners
Exception - one is allowed if:
1. Written proxy
2. Issued in and/or capacity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Voting for treasury shares

A

treasury shares shall have no voting rights as long as such shares remain in the treasury

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

T/F: Stockholders and members may vote in person or by proxy in all meeting of stockholders or members

A

True, when authorized in the bylaws or by a majority of the BOD

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

T/F: The stockholders or members of corporations may also vote through remote communication or in absentia

A

True, provided, that the votes are received before the corporation finishes the tally of votes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

T/F: A stockholder or member who participates through remote communication or in absentia, shall be deemed present for purposes of quorum

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Proxies

A

Limitations

  1. It must be in writing
  2. signed by SH and
  3. filed before the scheduled meeting

GR - It is valid only for the meeting intended
Exception - Continuing proxy will be valid only for a period of 5 years

GR - Revocable
Exception - Proxy coupled with interest

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

T/F: One or more stockholders of a stock corporation may create a voting trust for the purpose of conferring upon a trustee or trustees right to vote and other rights pertaining to the shares for a period not exceeding five (5) years at any time

A

True

Limitations

  1. Valid only for a period of 5 years (exception)
  2. It must be in writing and notarized
  3. It must be filed in the SEC
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

T/F: The trustee or trustees shall not execute and deliver to the transferors, voting trust certificates, which shall not be transferable in the same manner and with the same effect as certificates of stock

A

False - the trustee or trustees shall execute

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

T/F: The voting trust agreement filed with the corporation shall be subject to examination by any stockholder of the corporation in the same manner as any other corporate book or record

A

True, provided, that both the trustor and the trustee or trustees may exercise the right of inspection of all corporate books and records in accordance with the provisions of this code

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

T/F: Any other stockholder may not transfer the shares to the same trustee or trustees upon the terms and conditions stated in the voting trust agreement, and thereupon shall be bound by all the provisions of said agreement

A

False - may transfer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Voting trusts

A

No voting trust agreement shall be entered into for purposes of circumventing the laws against anti-competitive agreements, abuse of dominant position, anti-competitive mergers and acquisitions, violation of nationality and capital requirements, or for the perpetuation of fraud.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Rights granted in a voting trust agreement

A

Unless expressly renewed, all rights granted in a voting trust agreement shall automatically expire at the end of the agreed period. The voting trust certificates as well as the certificates of stock in the name of the trustee or trustees shall thereby be deemed cancelled and new certificates of stock shall be reissued in the name of trustors.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

T/F: The voting trustee or trustees may vote by proxy or in any manner authorized under the bylaws unless the agreement provides otherwise

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Subscription Contract

A

A person may become a stockholder:

  1. By a subscription contract
  2. By purchase from treasury shares
  3. By transfer from a previous stockholder
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Pre-incorporation Subscription

A

GR –Irrevocable for a period of 6 months

Exception

  1. All the subscribers consent to the revocation
  2. Fails to materialize within the said period

Exception to the exception – After the articles of incorporation have been submitted to SEC

31
Q

Consideration for Stocks

A

Stocks shall not be issued for consideration less than the par or issued price

32
Q

Consideration for issuance of stock

A
  1. Actual cash paid to the corporation;
  2. Property, tangible or intangible, actually received by the corporation and necessary or convenient for its use and lawful purposes at a fair valuation equal to the par or issued value of the stock issued;
  3. Labor performed for or services actually rendered to the corporation;
  4. Previously incurred indebtedness by the corporation;
  5. Amounts transferred from unrestricted retained earnings to stated capital;
  6. Outstanding shares exchanged for stocks in the event of reclassification or conversion;
  7. Shares of stock in another corporation; and/or
  8. Other generally accepted form of consideration
33
Q

Consideration for issuance of stock (2)

A

Where the consideration is other than actual cash, or consists of intangible property such as patents or copyrights, the valuation thereof shall initially be determined by the stockholders or the board of directors, subject to the approval of the Commission

34
Q

Consideration for issuance of stock (3)

A

Shares of stock shall not be issued in exchange for promissory notes or future services. The same considerations provided in this section, insofar as applicable, may be used for the issuance of bonds by the corporation

35
Q

Consideration for issuance of stock (4)

A

The issued price of no-par value shares may be fixed in the articles of incorporation or by the board of directors pursuant to authority conferred by the articles of incorporation or the bylaws, or if not so fixed, by the stockholders representing at least a majority of the outstanding capital stock at a meeting duly called for the purpose

36
Q

Transferring of ownership from one person to another.

A

Absolute Transfer

37
Q

A kind of transfer where the ownership is not transferred.

A

Limited Transfer

38
Q

The sale of the certificate of stock is an example of what kind of transfer?

A

Absolute Transfer

39
Q

A pledge or mortgage, where the transfer of the certificate of stock is used only as collateral or security, is an example of what kind of transfer?

A

Limited Transfer

40
Q

What is the purpose of the Certificate of Stock?

A

PROOF of ownership or Evidence

41
Q

Is the Certificate of Stock transferrable? Why?

A

YES, because it is a PERSONAL PROPERTY.

42
Q

What are the 2 circumstances, when the certificate of stock is not transferrable?

A
  1. Close Corporation

2. Widely-held Corporation

43
Q

T/F: By way of exception, SEC may require corporations whose certificates are traded in trading markets and which can reasonably demonstrate their capability to do so to issue their securities or shares of stocks in UNCERTIFICATED or SCRIPLESS form in accordance with the rules of the SEC.

A

True, Section 62, last sentence, 1st paragraph

44
Q

Can the corporation prohibit the transfer of the certificate of stock?

A

NO, because it is transferrable and it is a personal property.

45
Q

Can the corporation regulate the transfer of the certificate of stock?

A

YES, regulate means - only to impose conditions for the transfer.

46
Q

Supposed, the shareholder already paid in full the subscription and the corporation denied the issuance of the certificate of stock, what is the remedy?
(Remedy in case of denial of issuance of a certificate of stock)

A

Mandamus

47
Q

What is the effect of the transfer of certificate of stock, if there is no indorsement?

A

Not a valid transfer

48
Q

What is the effect of the transfer of certificate of stock, if it is indorsed and delivered?

A

Valid only to the parties

49
Q

What is the effect of the trans of certificate of stock, if it is registered in the books of the corporation?

A

Valid to TPs

50
Q

What are the 4 instances, when stock becomes watered stock?

A
  1. it was issued less than the par value or issued price
  2. there is no consideration
  3. issued other than cash
  4. valued in excess of its fair value
51
Q

T/F: The agreement to issue a watered stock is VOID, but the actual issuance itself is not void.

A

True.

52
Q

Can the corporation recover interest from the Unpaid Subscriptions?

A

GR: No interest
E: if there is a stipulation to pay interest

53
Q

If there is a stipulation to pay interest for the unpaid subscription, how much can the corporation recover?

A

GR: rate in the subscription contract
E: if it is not fixed, the legal rate will apply

54
Q

T/F: The corporation can collect through court action, the amount due on any unpaid
subscription, with accrued interest, costs and expenses.

A

T

55
Q

Effect of Delinquency

A

Rights are suspended except for the rights to receive dividend

56
Q

Rights of holders of unpaid shares (not delinquent)

A

All rights of a stockholder

57
Q

What is the first step when the certificate of stock is lost or destroyed?

A

The registered owner of a certificate of stock in a corporation or a legal
representative shall file with the corporation an affidavit in triplicate reporting the
circumstances as to how the certificate was lost, stolen or destroyed, the number of shares
represented, the serial number of the certificate and the name of the corporation
which issued the same.

58
Q

How often should the corporation publish a newspaper publication regarding the lost, stolen, or destroyed certificate of stock?

A

Once a week for 3 consecutive weeks

59
Q

At whose expense would the publication be? the corporation or the owner of the certificate of stock?

A

the registered owner of the lost, destroyed, or stolen certificate of stock

60
Q

What is the waiting period for the issuance of a new stock certificate?

A

one year from date of last publication

61
Q

Where should the books of the corporation be kept?

A

at its principal office

62
Q

Who can inspect corporate books?

A

a director, trustee, stockholder or member of the corporation in person or by a representative
at reasonable hours on business days

63
Q

The inspecting or reproducing party shall remain bound by confidentiality rules under prevailing
laws, such as the__________

A

“Intellectual Property Code of the Philippines”, “Data Privacy Act of 2012”, “The Securities Regulation Code”, and the Rules of Court

64
Q

Who has no right of inspection?

A

who is not a stockholder or member of record, or is a competitor, director,
officer, controlling stockholder or otherwise represents the interests of a competitor

65
Q

What is the effect if the corporation’s officer or agent refuses?

A

a. liable for damages

b. punishable under Sec 161 RCC

66
Q

T/F: SEC can conduct summary investigation and issue an order.

A

T

67
Q

What is the period in reporting denial of inspection?

A

5 days

68
Q

Stock corporations must also keep a (what kind of book)

A

stock and transfer book

69
Q

A _____ is engaged principally in the business of registering transfers of
stocks in behalf of a stock corporation

A

stock transfer agent

70
Q

In cases of stock corporations which transfer and/or trade stocks
in secondary markets, the commission may require a/an _______

A

independent transfer agent

71
Q

In the right to financial statements, what is the period in which the corporation must issue its most recent financial statement?

A

Within 10 days from receipt of their written request

72
Q 
If the total assets or total liabilities of the corporation is less than Six hundred
thousand pesos (P600,000.00), who can certify the financial statements?
A

the financial statements may be certified under oath by the treasurer and
the president

73
Q

What is the effect if the corporation’s officer or agent refuses?

A

a. liable for damages

b. punishable under Sec 161 RCC

LAW2 (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions