Beruflich Dokumente
Kultur Dokumente
Part VI
JGA Medina
Bus. Org II, Philippine Law School
Section 74: Keep and carefully preserve at its principal office:
• A record of all business transactions and minutes of all meetings
• Records and minutes shall be open to inspection at reasonable hours on business
days and may demand a copy of excerpts at his expense.
• Refusal of inspection and to provide copies of excerpts results in liability for
damages offense punishable under Section 144 (fine of 1k to 10k and/or
imprisonment 30 days to 5 years)
• If refusal is pursuant to a resolution or order of the board, the liability shall be
imposed upon the directors or trustees who voted for refusal.
• Defense: Person demanding improperly used information secured through any
prior examination of the records or minutes of a) such corporation b) any other
corporation, or c) was not acting in good faith or for a legitimate purpose.
F & S Velasco Co., Inc. v. Madrid,
G.R. No. 208844, November 10, 2015
Madrid may compel the issuance of certificates of stock in his favor, as well as the
registration of Angela's stocks in his name in FSVCI's Stock and Transfer Book.
Verily, all transfers of shares of stock must be registered in the corporate books in
order to be binding on the corporation. Specifically, this refers to the Stock and
Transfer Book, which is described in Section 74 of the same Code as follow
Philippine Associated Smelting and Refining Corp. v. Lim,
G.R. No. 172948, October 5, 2016
• Stock corporations must keep a stock and transfer book which keeps a record,
among others, of all stocks in the names of the stockholders, 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.
• Kept in the principal office of the corporation or in the office of its stock transfer
agent.
Only absolute transfers of shares of stock are required to be recorded in the corporation's
stock and transfer book in order to have "force and effect as against third persons." In
Chemphil Export and Import Corporation v. Court of Appeals, et al., the Court enunciated
the rule that attachments of shares are not considered "transfer" and need not be
recorded in the corporations' stock and transfer book, viz.:
"Are attachments of shares of stock included in the term "transfer" as provided in Sec.
63 of the Corporation Code? We rule in the negative. As succinctly declared in the case
of Monserrat v. Ceron, chattel mortgage over shares of stock need not be registered in
the corporation's stock and transfer book inasmuch as chattel mortgage over shares of
stock does not involve a "transfer of shares," and that only absolute transfers of shares
of stock are required to be recorded in the corporation's stock and transfer book in
order to have "force and effect as against third persons."
Section 75. Right to financial statements. –
• Within ten (10) days from receipt of a written request of furnish to him its most
recent financial statement,
• At the regular meeting board shall present a financial report of the operations of
the corporation for the preceding year, including audited financial statements.
• If than P50,000.00, the financial statements may be certified under oath by the
treasurer or any responsible officer of the corporation.
Section 76. Plan of Merger or Consolidation. –
• Merger - two or more corps. merge into one of the constituent corporations
• Consolidate - two or more corps. form a new consolidated corporation.
• The board of each corporation shall approve a plan of merger or consolidation setting
forth:
1. The names of the constituent corporations;
2. The terms of the merger or consolidation and the mode of carrying into effect;
3. For mergers: A statement of the changes, if any, in the articles of incorporation of
surviving corporation.
For consolidation: All statements required to be set forth in the articles of
incorporation for corporations.
4. Such other provisions deemed necessary or desirable.
Bank of Commerce v. Radio Philippines Network, Inc.,
G.R. No. 195615, April 21, 2014], 733 PHIL 491-581
• Merger is a re-organization of two or more corporations that results in their
consolidating into a single corporation, which is one of the constituent corporations, one
disappearing or dissolving and the other surviving. To put it another way, merger is the
absorption of one or more corporations by another existing corporation, which retains its
identity and takes over the rights, privileges, franchises, properties, claims, liabilities and
obligations of the absorbed corporation(s). The absorbing corporation continues its
existence while the life or lives of the other corporation(s) is or are terminated.
• A merger does not become effective upon the mere agreement of the constituent
corporations. All the requirements specified in the law must be complied with in order
for merger to take effect. Section 79 of the Corporation Code further provides that the
merger shall be effective only upon the issuance by the Securities and Exchange
Commission (SEC) of a certificate of merger.
Section 77. Stockholder’s or member’s approval. –
• At least two (2) weeks notice personally or by registered mail to all members/SH.
Notice shall state the purpose of the meeting and include summary of the plan.
• The vote of at least two-thirds (2/3) of stockholders or members of constituent
corporations.
• Dissenting stockholder in stock corporations may avail of appraisal right. If after
the approval the plan is abandoned, the appraisal right is extinguished.
• Any amendment to the plan of merger or consolidation must be ratified by two-
thirds (2/3) of stockholders or members of constituent corporations.
• Such plan, together with any amendment, shall be considered as the agreement
of merger or consolidation.
Section 78. Articles of merger or consolidation.
After the approval by the stockholders or members, the articles of merger or
articles of consolidation shall be executed by each of the constituent corporations,
to be signed by the president or vice-president and certified by the secretary or
assistant secretary of each corporation setting forth:
1. The plan of the merger or the plan of consolidation;
2. As to stock corporations, the number of shares outstanding, or in the case of
non-stock corporations, the number of members; and
3. As to each corporation, the number of shares or members voting for and
against such plan, respectively. (n)
*These take the place of the articles of incorporation of the consolidated
corporation, or amend the articles of incorporation of the surviving corporation.
Section 79. Effectivity of merger or consolidation. –
• The articles of merger or of consolidation shall be submitted to the SEC. In the
case of merger or consolidation of banks or banking institutions, building and
loan associations, trust companies, insurance companies, public utilities,
educational institutions and other special corporations governed by special laws,
the favorable recommendation of the appropriate government agency shall first
be obtained.
• The issuance of the certificate of merger is crucial because not only does it bear out
SEC's approval but it also marks the moment when the consequences of a merger take
place. By operation of law, upon the effectivity of the merger, the absorbed corporation
ceases to exist but its rights and properties, as well as liabilities, shall be taken and
deemed transferred to and vested in the surviving corporation.
• The same rule applies to consolidation which becomes effective not upon mere
agreement of the members but only upon issuance of the certificate of consolidation by
the SEC. When the SEC, upon processing and examining the articles of consolidation, is
satisfied that the consolidation of the corporations is not inconsistent with the provisions
of the Corporation Code and existing laws, it issues a certificate of consolidation which
makes the reorganization official. The new consolidated corporation comes into
existence and the constituent corporations are dissolved and cease to exist.
Section 80. Effects of merger or consolidation. –
• The separate existence of the constituent corporations shall cease, except that of
the surviving or the consolidated corporation;
• The surviving or the consolidated corporation shall take over all the assets and
liabilities of each of the constituent corporations without further act or deed;
• The rights of creditors or liens upon the property of any of the constituent
corporations shall not be impaired by such merger or consolidation.
Philippine Geothermal, Inc. Employees Union v. Unocal
G.R. No. 190187, September 28, 2016
• The merger of a corporation with another does not operate to dismiss the employees of
the corporation absorbed by the surviving corporation. This is in keeping with the nature
and effects of a merger as provided under law and the constitutional policy protecting
the rights of labor. The employment of the absorbed employees subsists. Necessarily,
these absorbed employees are not entitled to separation pay on account of such merger
in the absence of any other ground for its award.
• This acquisition of all assets, interests, and liabilities of the absorbed corporation
necessarily includes the rights and obligations of the absorbed corporation under its
employment contracts. Consequently, the surviving corporation becomes bound by the
employment contracts entered into by the absorbed corporation. These employment
contracts are not terminated. They subsist unless their termination is allowed by law.
Sumifru (Philippines) Corp. v. Baya,
G.R. No. 188269, April 17, 2017
• Sumifru's contention that it should only be held liable for the period when Baya stayed
with DFC as it only merged with the latter and not with AMSFC is untenable. Section 80
of the Corporation Code of the Philippines clearly states that one of the effects of a
merger is that the surviving company shall inherit not only the assets, but also the
liabilities of the corporation it merged with.
• In this case, it is worthy to stress that both AMSFC and DFC are guilty of acts constitutive
of constructive dismissal performed against Baya. As such, they should be deemed as
solidarily liable for the monetary awards in favor of Baya. Meanwhile, Sumifru, as the
surviving entity in its merger with DFC, must be held answerable for the latter's liabilities,
including its solidary liability with AMSFC arising herein. Verily, jurisprudence states that
"in the merger of two existing corporations, one of the corporations survives and
continues the business, while the other is dissolved and all its rights, properties and
liabilities are acquired by the surviving corporation," as in this case.
Section 81. Any stockholder shall have the right to dissent and demand payment of
the fair value of his shares in the following instances:
• Written demand on the corporation for payment of the fair value of the shares. Failure to
make the demand within such period shall be deemed a waiver of the appraisal right.
• Corporation shall pay to such stockholder the fair value thereof as of the day prior to the
date on which the vote was taken, excluding any appreciation or depreciation.
• If within sixty (60) days from the date of the vote, there is no agreement on the fair value
of the shares, it shall be determined by three (3) disinterested persons and their award
shall be paid within thirty (30) days after such award.
• No payment shall be made to any dissenting stockholder unless the corporation has
unrestricted retained earnings in its books to cover such payment.
Section 83. Effect of demand :
• All rights accruing to such shares, including voting and dividend rights, shall be
suspended in accordance.
• If the dissenting stockholder is not paid the value of his shares within 30 days
after the award, his voting and dividend rights shall immediately be restored.