TITLE VIISTOCKS AND
STOCKHOLDERS
Sec. 60. Subscription
contract. - Any contract for the acquisition of unissued
stock in an existing corporation or a corporation still to be formed
shall
be deemed a subscription within the meaning of this Title,
notwithstanding
the fact that the parties refer to it as a purchase or some other
contract.
(n)
Sec. 61. Pre-incorporation
subscription.- A
subscription
for shares of stock of a corporation still to be formed shall be
irrevocable
for a period of at least six (6) months from the date of subscription,
unless all of the other subscribers consent to the revocation, or
unless
the incorporation of said corporation fails to materialize within said
period or within a longer period as may be stipulated in the contract
of
subscription: Provided, That no pre-incorporation subscription may be
revoked
after the submission of the articles of incorporation to the Securities
and Exchange Commission. (n)
Sec. 62. Considering
for stocks. - Stocks shall not be issued for a
consideration
less than the par or issued price thereof. Consideration for the
issuance
of stock may be any or a combination of any two or more of the
following:
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 of
the
corporation;
5. Amounts transferred from
unrestricted retained
earnings to stated capital; and
6. Outstanding shares exchanged for
stocks
in the event of reclassification or conversion.
Where the
consideration is other than actual
cash, or consists of intangible property such as patents of copyrights,
the valuation thereof shall initially be determined by the
incorporators
or the board of directors, subject to approval by the Securities and
Exchange
Commission.
Shares of
stock shall not be issued in exchange
for promissory notes or future service.
The same
considerations provided for in this
section, insofar as they may be applicable, may be used for the
issuance
of bonds by the corporation.
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 upon it by the articles of
incorporation
or the by-laws, or in the absence thereof, by the stockholders
representing
at least a majority of the outstanding capital stock at a meeting duly
called for the purpose. (5 and 16)
Sec. 63. Certificate
of stock and transfer of shares. - The capital stock of
stock corporations shall be divided into shares for which certificates
signed by the president or vice president, countersigned by the
secretary
or assistant secretary, and sealed with the seal of the corporation
shall
be issued in accordance with the by-laws. Shares of stock so issued are
personal property and may be transferred by delivery of the certificate
or certificates endorsed by the owner or his attorney-in-fact or other
person legally authorized to make the transfer. No transfer, however,
shall
be valid, except as between the parties, until the transfer is recorded
in the books of the corporation showing the names of the parties to the
transaction, the date of the transfer, the number of the certificate or
certificates and the number of shares transferred.
No shares of
stock against which the corporation
holds any unpaid claim shall be transferable in the books of the
corporation.
(35)
Sec. 64. Issuance
of stock certificates. - 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. (37)
Sec. 65. Liability
of directors for watered stocks. - Any director or
officer
of a corporation consenting to the issuance of stocks for a
consideration
less than its par or issued value or for a consideration in any form
other
than cash, valued in excess of its fair value, or who, having knowledge
thereof, does not forthwith express his objection in writing and file
the
same with the corporate secretary, shall be solidarily, liable with the
stockholder concerned to the corporation and its creditors for the
difference
between the fair value received at the time of issuance of the stock
and
the par or issued value of the same. (n)
Sec. 66. Interest
on unpaid subscriptions.-
Subscribers for stock shall pay to the corporation interest on all
unpaid
subscriptions from the date of subscription, if so required by, and at
the rate of interest fixed in the by-laws. If no rate of interest is
fixed
in the by-laws, such rate shall be deemed to be the legal rate. (37)
Sec. 67. Payment
of balance of subscription. - Subject to the provisions
of the contract of subscription, the board of directors of any stock
corporation
may at any time declare due and payable to the corporation unpaid
subscriptions
to the capital stock and may collect the same or such percentage
thereof,
in either case with accrued interest, if any, as it may deem necessary.
Payment of
any unpaid subscription or any
percentage thereof, together with the interest accrued, if any, shall
be
made on the date specified in the contract of subscription or on the
date
stated in the call made by the board. Failure to pay on such date shall
render the entire balance due and payable and shall make the
stockholder
liable for interest at the legal rate on such balance, unless a
different
rate of interest is provided in the by-laws, computed from such date
until
full payment. If within thirty (30) days from the said date no payment
is made, all stocks covered by said subscription shall thereupon become
delinquent and shall be subject to sale as hereinafter provided, unless
the board of directors orders otherwise. (38)
Sec. 68. Delinquency
sale. - The board of directors may, by resolution, order
the sale of delinquent stock and shall specifically state the amount
due
on each subscription plus all accrued interest, and the date, time and
place of the sale which shall not be less than thirty (30) days nor
more
than sixty (60) days from the date the stocks become delinquent.
Notice of
said sale, with a copy of the resolution,
shall be sent to every delinquent stockholder either personally or by
registered
mail. The same shall furthermore be published once a week for two (2)
consecutive
weeks in a newspaper of general circulation in the province or city
where
the principal office of the corporation is located.
Unless the
delinquent stockholder pays to
the corporation, on or before the date specified for the sale of the
delinquent
stock, the balance due on his subscription, plus accrued interest,
costs
of advertisement and expenses of sale, or unless the board of directors
otherwise orders, said delinquent stock shall be sold at public auction
to such bidder who shall offer to pay the full amount of the balance on
the subscription together with accrued interest, costs of advertisement
and expenses of sale, for the smallest number of shares or fraction of
a share. The stock so purchased shall be transferred to such purchaser
in the books of the corporation and a certificate for such stock shall
be issued in his favor. The remaining shares, if any, shall be credited
in favor of the delinquent stockholder who shall likewise be entitled
to
the issuance of a certificate of stock covering such shares.
Should there
be no bidder at the public auction
who offers to pay the full amount of the balance on the subscription
together
with accrued interest, costs of advertisement and expenses of sale, for
the smallest number of shares or fraction of a share, the corporation
may,
subject to the provisions of this Code, bid for the same, and the total
amount due shall be credited as paid in full in the books of the
corporation.
Title to all the shares of stock covered by the subscription shall be
vested
in the corporation as treasury shares and may be disposed of by said
corporation
in accordance with the provisions of this Code.
Sec. 69. When
sale may be questioned
- No action to recover delinquent stock sold can be sustained upon the
ground of irregularity or defect in the notice of sale, or in the sale
itself of the delinquent stock, unless the party seeking to maintain
such
action first pays or tenders to the party holding the stock the sum for
which the same was sold, with interest from the date of sale at the
legal
rate; and no such action shall be maintained unless it is commenced by
the filing of a complaint within six (6) months from the date of sale.
(47a)
Sec. 70. Court
action to recover unpaid subscription.-
Nothing in this Code shall prevent the corporation from collecting by
action
in a court of proper jurisdiction the amount due on any unpaid
subscription,
with accrued interest, costs and expenses. (49a)
Sec. 71. Effect
of delinquency. - No delinquent stock shall be voted for
be entitled to vote or to representation at any stockholder's meeting,
nor shall the holder thereof be entitled to any of the rights of a
stockholder
except the right to dividends in accordance with the provisions of this
Code, until and unless he pays the amount due on his subscription with
accrued interest, and the costs and expenses of advertisement, if any.
(50a)
Sec. 72. Rights
of unpaid shares. - Holders of subscribed shares not
fully
paid which are not delinquent shall have all the rights of a
stockholder.
(n)
Sec. 73. Lost
or destroyed certificates. - The following procedure
shall
be followed for the issuance by a corporation of new certificates of
stock
in lieu of those which have been lost, stolen or destroyed:
1. The registered owner of a certificate
of stock in a corporation or his legal representative shall file with
the
corporation an affidavit in triplicate setting forth, if possible, the
circumstances as to how the certificate was lost, stolen or destroyed,
the number of shares represented by such certificate, the serial number
of the certificate and the name of the corporation which issued the
same.
He shall also submit such other information and evidence which he may
deem
necessary;
2. After verifying the affidavit and
other
information and evidence with the books of the corporation, said
corporation
shall publish a notice in a newspaper of general circulation published
in the place where the corporation has its principal office, once a
week
for three (3) consecutive weeks at the expense of the registered owner
of the certificate of stock which has been lost, stolen or destroyed.
The
notice shall state the name of said corporation, the name of the
registered
owner and the serial number of said certificate, and the number of
shares
represented by such certificate, and that after the expiration of one
(1)
year from the date of the last publication, if no contest has been
presented
to said corporation regarding said certificate of stock, the right to
make
such contest shall be barred and said corporation shall cancel in its
books
the certificate of stock which has been lost, stolen or destroyed and
issue
in lieu thereof new certificate of stock, unless the registered owner
files
a bond or other security in lieu thereof as may be required, effective
for a period of one (1) year, for such amount and in such form and with
such sureties as may be satisfactory to the board of directors, in
which
case a new certificate may be issued even before the expiration of the
one (1) year period provided herein: Provided, That if a contest has
been
presented to said corporation or if an action is pending in court
regarding
the ownership of said certificate of stock which has been lost, stolen
or destroyed, the issuance of the new certificate of stock in lieu
thereof
shall be suspended until the final decision by the court regarding the
ownership of said certificate of stock which has been lost, stolen or
destroyed.
Except in
case of fraud, bad faith, or negligence
on the part of the corporation and its officers, no action may be
brought
against any corporation which shall have issued certificate of stock in
lieu of those lost, stolen or destroyed pursuant to the procedure
above-described.
(R. A. 201a)
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