Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
CLOSE CORPORATIONS
Sec. 96. Definition and applicability of Title. - A close
corporation, within the meaning of this Code, is one whose
articles of incorporation provide that: (1) 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);
(2) all the issued stock of all classes shall be subject to one
or more specified restrictions on transfer permitted by this
Title; and (3) The corporation shall not list in any stock
exchange or make any public offering of any of its stock of
any class. Notwithstanding the foregoing, a corporation
shall not be deemed a close corporation when at least twothirds (2/3) of its voting stock or voting rights is owned or
controlled by another corporation which is not a close
corporation within the meaning of this Code.
Any corporation may be incorporated as a close
corporation, except mining or oil companies, stock
exchanges, banks, insurance companies, public utilities,
educational institutions and corporations declared to be
vested with public interest in accordance with the
provisions of this Code.
The provisions of this Title shall primarily govern close
corporations: Provided, That the provisions of other Titles of
this Code shall apply suppletorily except insofar as this Title
otherwise provides.
Close corporation:
A corporation in which the stock is holding a few hands, or
in families, and which stock s not at all or only rarely dealt
in buying or selling.
Can all corporations be incorporated? (PIPE-BOMS)
GR: Yes.
Except:
Mining
Oil
Stock Exchange
Bank
Insurance
Public Utilities
Educational Institutions
Corporations declared vested with
public interest
CLOSELY HELD
- Focuses
more
on
the
number of
SH in the
corporation
at
that
particular
time
indicating
that
they
are few in
numbers
- Shares are
owned by
a relatively
limited
number of
SH
OF
CLOSED
Determination
on the part of
the
participants in
the enterprise
to keep the
outsiders from
acquiring any
interest in the
business and
may indicate
that they have
taken steps to
accomplish
that objective
by
SHs
agreement or
provision
in
the AOI or by
laws
CLOSE
(2)
(3)
Notes:
Close Corporation
"Regular"
Corporati
No.
stockholders
Management
Managed
Directors
Meetings
May be dispensed
(Sec. 101)
Actual me
required.
Quorum
Voting
with
No limit
Pre-emptive right
A
narrow
distribution
of
ownership does not, by itself,
make a close corporation. (San
Juan
Structural
and
Steel
Fabricators v. CA, 296 SCRA 631)
FROM
Extends
to
all
stock, Does not
including treasury shares treasury s
(Sec. 102)
Buy-back
shares
Resolution
deadlocks
May be <
B
Dissolution
Generally requires a
2/3
vote
of
the
stockholders and a
majority vote of the
B
BOD.
B
B
restriction.
4. Whenever any person to whom stock of a
close corporation has been issued or
transferred has, or is conclusively presumed
under this section to have, notice either (a)
that he is a person not eligible to be a holder
of stock of the corporation, or (b) that transfer
of stock to him would cause the stock of the
corporation to be held by more than the
number of persons permitted by its articles of
incorporation to hold stock of the corporation,
or (c) that the transfer of stock is in violation
of a restriction on transfer of stock, the
corporation may, at its option, refuse to
register the transfer of stock in the name of
the transferee.
5. The provisions of subsection (4) shall not
applicable if the transfer of stock, though
contrary to subsections (1), (2) of (3), has
been consented to by all the stockholders of
the close corporation, or if the close
corporation has amended its articles of
incorporation in accordance with this Title.
6. The term "transfer", as used in this section,
is not limited to a transfer for value.
7. The provisions of this section shall not
impair any right which the transferee may
have to rescind the transfer or to recover
under any applicable warranty, express or
implied.
No. 6:
- term transfer includes donation
No. 7:
- breach of any restriction in the issuance of transfer
of stock is without prejudice to the right of the
transferee under existing laws to rescind the
transaction or recover under applicable warranty,
express or implied
Cas
e:
Note:
UNDER (1):
- pre-incorporation agreements among SH shall
continue to be valid and binding even after the
UNDER (2):
- to voting or pooling agreements in particular
UNDER (3):
- makes clear that even if the effect of a provision in
any written agreement relating to any phrase of the
corporate affairs is to make the parties partners
among themselves, the same shall not be
invalidated on that ground
UNDER (5):
- SH actively engaged in the management if a close
corporation shalle be personally liable for corporate
torts unless corporation has insurance
- President of a close corporation who actively
manages the business falls in the meaning of
employer and may be held jointly and severally
liable for the obligations of the corporation to its
illegally dismissed employeed
AGREEMENTS
MANAGERS:
BY
SH,
EFFECTS
WHERE
SH
MEETING
IS
NOT
ARE
1.
2.
3.
4.
DULAY VS. CA
A corporate action taken at a board meeting without proper
call or notice in a close corporation is deemed ratified by
the absent director unless the latter promptly files his
written objection with the secretary of the corporation
after having knowledge of the meeting which Virgilio Dulay
failed to do.
DIFFERENCE OF DULAY & SAN JUAN CASE:
No delivery according to Dulay but the court said that there
is CONSTRUCTIVE DELIVERY because it is a public
instrument
Sec. 102. Pre-emptive right in close corporations. The pre-emptive 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.
PR in Open Corp
Extends only to new
issues of shares out of
an increase of the
capital stock
- Exception in Sec. 39
of CC is applicable
-
PR in Close Corp
Extends to all stocks
to be issued whether
common/preferred.
Newly
authorized
shares
or
newly
issued
balance
of
originally authorized
shares
including
treasury shares
Fair
value
shares
of Close corporation
Appraisal Ri
"Regular" cor
Only the
enumerated
81 and Sec. 4
of Must
be > par
or May be <
issued value (Sec. 105) issued value