Section 7 Founder Shares Given to organizers and promoters for first (5) years If he is given a voting rights, he cannot

give it to others Sure of being a board of director Priority Dividends

Section 8 Redeemable Shares Also called preference shares Issued only if indicated in the Articles Specific amount bond Fixed interest and term Has the rights like a creditor X would need to pay the shareholder with his interest regardless of profit except if insolvency

Section 9 Treasury Shares Issued and paid but reacquired by payment, redemption or donation Purchase o Delinquent Shares bidding where there are no bidders, X shall pay for it. Not part of outstanding

What if the shares bought have voting rights and dividends rights can they exercise them? NO Rights are once again activated when they are sold to the public once again. Section 10 Incorporators Steps 1. Promotion 2. Incorporating 3. Formal Organization and commencement organization Then 1. Drafts and Execute Articles of Corporation 2. Assign a Treasurer a. Affidavit for 25%-25% rule ( Attach and submit to SEC ) b. Open an account where the 25% paid shall be deposited (get certificate from branch manager and submit to SEC and attach) c. Get Recommendation letter from appropriate government agency 3. Payment of the filing and publication fees ( SEC ) Natural persons 5 <= X <= 15 people Legal Age (18) Majority should be living in the Philippines (Can all be foreigners but must live in the PHL) Own/Subsci at least 1 share of capital stock

Section 11 Term 50 years maximum term Renewal is between the 46th year and 50th year

Section 12 No minimum capital stock < 5000

Section 13 25% - 25% IF no par value shares are issued. The computation of the 25-25 rule is based from the number of shares since there is no amount indicated A,B,C,D,E contributed total of the required paid up but varies in their contribution is this allowed? YES as long as they were able to satisfy the total paid up required. (can be higher) What if the paid up will be less than 5000 what is the remedy of the Inco? They need to increase the paid up

When should the balance be paid? 1. Contract of subscription 2. Upon call of Board of Directors Section 14 Contents of Articles Written in English and Filipino 1. Name of Corp or Inc. 2. Specific purpose 3. Place of business if there is a change in location you should amend the articles except if its in the same city. Ex. Metro Manila from PQUE MAKATI 4. Nationality