Scribd Logo
Upload

Welcome to Scribd!

  • 6 views

    (Week 9) 9.0.6-SEC-Opinion-dated-September-1-1995-bearer-stock-certificate

    Uploaded by

    Jadel Kaye ALJ Training
    Triabo Development Corporation requested an opinion on the validity of issuing Class B common bearer shares that have full voting rights and can be transferred through delivery without endorsement. The letter responds that the Corporation Code requires endorsement for valid stock transfers and recording share ownership in the corporate books to establish rights like receiving dividends. Therefore, the proposed features of the Class B shares making them bearer shares transferable without endorsement and allowing dividend collection with just coupons are not allowed under current law.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    (Week 9) 9.0.6-SEC-Opinion-dated-September-1-1995-bearer-stock-certificate

    Uploaded by

    Jadel Kaye ALJ Training
    6 views2 pages
    Triabo Development Corporation requested an opinion on the validity of issuing Class B common bearer shares that have full voting rights and can be transferred through delivery without endorsement. The letter responds that the Corporation Code requires endorsement for valid stock transfers and recording share ownership in the corporate books to establish rights like receiving dividends. Therefore, the proposed features of the Class B shares making them bearer shares transferable without endorsement and allowing dividend collection with just coupons are not allowed under current law.

    Original Title

    [Week 9] 9.0.6-SEC-Opinion-dated-September-1-1995-bearer-stock-certificate

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Triabo Development Corporation requested an opinion on the validity of issuing Class B common bearer shares that have full voting rights and can be transferred through delivery without endorsement. The letter responds that the Corporation Code requires endorsement for valid stock transfers and recording share ownership in the corporate books to establish rights like receiving dividends. Therefore, the proposed features of the Class B shares making them bearer shares transferable without endorsement and allowing dividend collection with just coupons are not allowed under current law.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    6 views2 pages

    (Week 9) 9.0.6-SEC-Opinion-dated-September-1-1995-bearer-stock-certificate

    Uploaded by

    Jadel Kaye ALJ Training
    Triabo Development Corporation requested an opinion on the validity of issuing Class B common bearer shares that have full voting rights and can be transferred through delivery without endorsement. The letter responds that the Corporation Code requires endorsement for valid stock transfers and recording share ownership in the corporate books to establish rights like receiving dividends. Therefore, the proposed features of the Class B shares making them bearer shares transferable without endorsement and allowing dividend collection with just coupons are not allowed under current law.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    You are on page 1of 2

    September 1, 1995

    Triabo Development Corporation


    Aboitiz & Co., Inc. Bldg.
    Banilad, Cebu City 6000

    Attention : Ms . Sylvia A. Paderanga


    Madam:

    This refers to your letter dated August 11, 1995, requesting opinion on
    the validity of Class B shares which Triabo Development Corporation intends
    to issue. Specifically, the corporation would like to amend paragraph 3 of
    Article VII of its Articles of Incorporation, to read as follows: cdphil

    "Class B Common Bearer shares shall have full voting rights and
    privileges and are bearer in form. They shall be negotiable without
    endorsement and shall be transferable by delivery. Dividends are
    payable by presentation of numbered dividend coupons." (Emphasis
    supplied)

    You believe that the issuance of the above class of shares is valid and
    allowed by law as Section 63 of the Corporation Code does not categorically
    prohibit or disallow the issuance of shares in bearer form.
    Section 63 of the Corporation Code provides:
    "SECTION 63. Certificate of stock and transfer of shares. — . . . Shares
    of stock so issued are personal property and may be transferred by
    delivery of the certificate indorsed 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 so as to show 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." (Emphasis supplied)

    The above provision clearly requires the indorsement of the certificate


    of stock by the owner or duly authorized person in transferring ownership of
    shares of stock. Accordingly, the proposed bearer feature of the shares
    without the required indorsement by the owner of the certificate of stock
    evidencing the ownership thereof is not allowable under the present law.
    Relative to the other feature pertaining to dividend right by mere
    presentation of numbered coupons, the pertinent provisions of the
    Corporation Code provide:
    "SECTION 63. Certificate of stock and transfer of shares. — . . . No
    transfer, however, shall be valid, except as between the parties, until
    the transfer is recorded in the books of the corporation so as to show
    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. . . . (Emphasis supplied)

    CD Technologies Asia, Inc. © 2021 cdasiaonline.com


    "SECTION 74. . . .

    Stock corporations must also keep a book to be known as the "stock


    and transfer book" in which must be kept a record of all stocks in the
    names of the stockholders alphabetically arranged; the installments
    paid and unpaid on all stock for which subscription has been made,
    and the date of payment of any installment; a statement of every
    alienation, sale or transfer of stock made; the date thereof, and by and
    to whom made and such other entries as the by-laws may prescribe.
    The stock and transfer book shall be kept in the principal office of the
    corporation or in the office of its stock transfer agent and shall be open
    for inspection of any director or stockholder of the corporation at
    reasonable hours on business days."

    . . . ." (Emphasis supplied)

    Therefore, it is well-settled that the rights of a stockholder accrue only


    upon entry of his name in the books of the corporation. Hence, mere
    presentation of dividend coupons by the holder thereof, who is not recorded
    as a stockholder in the stock and transfer book, will not entitle him to receive
    dividends. A person who desires to be recognized as a stockholder for
    purposes of exercising stockholder's right, including the right to receive
    dividends, must secure a standing by having his ownership of shares
    recorded on the corporate books.
    Accordingly, the desired features attached to the aforementioned class
    of shares are not legally feasible under the present law. cda

    (SGD.) PERFECTO R. YASAY, JR.


    Acting Chairman

    CD Technologies Asia, Inc. © 2021 cdasiaonline.com

    You might also like