Requirements For An Incorporator

REQUIREMENTS FOR AN INCORPORATOR
Sec. 10. Number and qualifications of incorporators. - Any number of natural persons not less than five (5) but not more than fifteen
(15), all of legal age and a majority of whom are residents of the Philippines, may form a private corporation for any lawful purpose or
purposes. Each of the incorporators of a stock corporation must own or be a subscriber to at least one (1) share of the capital stock of
the corporation.
1. Natural persons
2. Legal age
3. Not less than 5 but not more 15
4. Majority are residents
5. For a stock corporation: each incorporator must own or subscribe at least 1 share
6. The incorporator must have legal capacity
CONTENTS OF AN ARTICLE OF INCPORATION (SECTION 14)
1. The name of the corporation;
2. The specific purpose or purposes for which the corporation is being incorporated.
Where a corporation has more than one stated purpose, the articles of incorporation shall state which is the primary purpose
and which is/are he secondary purpose or purpose
es: Provided, That a nonstock corporation may not include a purpose which would change or contradict its nature as such;
3. The place where the principal office of the corporation is to be located, which must be within the Philippines;
4. The term for which the corporation is to exist;
5. The names, nationalities and residences of the incorporators;
6. The number of directors or trustees, which shall not be less than five (5) nor more than fifteen (15);
7. The names, nationalities and residences of persons who shall act as directors or trustees until the first regular directors or
trustees are duly elected and qualified in accordance with this Code;
8. If it be a stock corporation, the amount of its authorized capital stock in lawful money of the Philippines, the number of shares
into which it is divided, and in case the share are par value shares, the par value of each, the names, nationalities and residences of
the original subscribers, and the amount subscribed and paid by each on his subscription, and if some or all of the shares are
without par value, such fact must be stated;
9. If it be a non-stock corporation, the amount of its capital, the names, nationalities and residences of the contributors and the
amount contributed by each; and
10. Such other matters as are not inconsistent with law and which the incorporators may deem necessary and convenient.
AMOUNT OF CAPITAL STOCK TO BE SUBSCRIBED AND PAID FOR THE PURPOSES OF INCORPORATION
Sec. 13. Amount of capital stock to be subscribed and paid for the purposes of incorporation. - At least twenty-five percent (25%) of the
authorized capital stock as stated in the articles of incorporation must be subscribed at the time of incorporation, and at least twenty-five
(25%) per cent of the total subscription must be paid upon subscription, the balance to be payable on a date or dates fixed in the
contract of subscription without need of call, or in the absence of a fixed date or dates, upon call for payment by the board of directors:
Provided, however, That in no case shall the paid-up capital be less than five Thousand (P5,000.00) pesos.
ANS:
At least 25% of the authorized capital stock must be subscribed2. At least 25% of the the subscription must be paid 3. The
paid-up capital shall not be less than P5,000
CAPITAL
Broad sense: The entire property or assets of the corporation.
Strict sense: Assets minus the liabilities. It is the net assets of the corporation.
Capital includes the amount invested by the stockholders plus the undistributed earnings less the losses and expenses. It changes.
Can you issue below par?

Original issuance: NO. Shares of stock shall not be issued for a consideration less than the par value. Such is called watered stock
which is prohibited in original issuances.Reason for prohibition: It will deceive the public if allowed. The prohibition is to protect persons
who may acquire stock who may become such on the faith of its outstanding shares fully paid. The prohibition secures equality among
subscribers and prevents discrimination against those who have paid in full the par.
Subsequent transfer: YES. The prohibition covers only original issue of stocks.
Can you issue double the par? (or triple or any amount above par)
YES, because of the concept of Market Value.
Market value: the amount in which a buyer is willing to buy and a seller is willing to sell, both without coercions. It is the price set in an
arms length transaction
Book value: Assets (according to sir, though I believe it should be net assets) divided by the number of shares outstanding.
DEFINITION OF TERMS
Authorized capital stock maximum amount of shares to be issued by a corporation
Subscribed capital stock the amount of shares a shareholder commits to buy
Paid up capital stock amount of subscribed shares that has been paid by shareholders
Legal capital aggregate amount of shares issued
May authorized capital change from time to time?
ANS:
GR: No. EXCEPTION: If articles of Incorporation are amended to this effect.
Capital Assets minus liabilities; changes from time to time, depending on the performance of corporation (WON income or loss)
Legal capital changes if there are new issuances of shares.
Outstanding shares issued and out which is in the hands of the public-shareholders already;
Subscribed capital - although not yet fully paid, but already the shareholders
When to Pay for the balance of subscribed capital shares?

ANS:
On the period provided for in the articles of incorporation, or Upon the call of the BODs

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REQUIREMENTS FOR AN INCORPORATOR

Can you issue below par?

When to Pay for the balance of subscribed capital shares?

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