Article 28p. 28

COMMERCIAL LAWS NEGOTIABLE INSTRUMENTS, CORPORATION, INSURANCE, TRANSPORTATION, BANKING

SECTION 72. Rights of Unpaid Shares . — Holders of

subscribed shares not fully paid which are not delinquent

shall have all the rights of a stockholder. (n)

SECTION 73. Lost or Destroyed Certificates . — The

following procedure shall be followed for the issuance by

a corporation of new certificate(s) of stock in lieu of those

which have been lost, stolen or destroyed:

1. The registered owner of certificate(s) of stock in a

corporation or his legal representative shall file with the

corporation

an

affidavit

in triplicate setting forth, if

possible, the circumstances as to how the certificate(s)

were lost, stolen or destroyed, the number of shares

represented by each certificate, the serial number(s) of

the certificate(s) and the name of the corporation which

issued

the

same.

He

shall

also

submit

such

other

information and evidence which he may deem necessary;

2. After verifying the affidavit and other information

and evidence with the books of the corporation, said

corporation shall publish a notice in a newspaper of

general circulation published in the place where the

corporation has its principal office, once a week for three

(3) consecutive weeks at the expense of the registered

owner of the certificate(s) of stock which have been lost,

stolen or destroyed. The notice shall state the name of

said corporation, the name of the registered owner and

the serial number(s) of said certificate(s), and the number

of shares represented by such certificate(s), and that after

the expiration of one (1) year from the date of the last

publication, if no contest has been presented to said

corporation regarding said certificate(s) of stock, the right

to

make

such

contest

shall

be

barred

and

said

corporation shall cancel in its books the certificate(s) of

stock which has been lost, stolen or destroyed and issue

in lieu thereof new certificate(s) of stock, unless the

registered owner files a bond or other security in lieu

thereof as may be required, running for a period of one (1)

year for a sum and in such form and with such sureties as

may be satisfactory to the board of directors, in which

case a new certificate may be issued even before the

expiration of the one (1) year period provided herein:

Provided , That if a contest has been presented to said

corporation or if an action is pending in court regarding

the ownership of said certificate(s) of stock which have

been lost, stolen or destroyed, the issuance of the new

certificate(s) of stock in lieu thereof shall be suspended

until

the

final

decision by the court regarding the

ownership of said certificate(s) of stock which have been

lost, stolen or destroyed.

Except in case of fraud, bad faith, or negligence on

the part of the corporation and its officers, no action may

be brought against any corporation which shall have

issued certificate(s) of stock in lieu of those lost, stolen or

destroyed pursuant to the procedure above-described.

(R.A. 201a)

TITLE VIII Corporate Books and Records

SECTION

74. Books to be Kept ; Stock Transfer

Agent . — Every corporation shall, at its principal office,

keep and carefully preserve a record of all business

transactions, and minutes of all meetings of stockholders

or members, or of the board of directors or trustees, in

which shall be set forth in detail the time and place of

holding the meeting, how authorized, the notice given,

whether the meeting was regular or special, if special its

object, those present and absent, and every act done or

ordered done at the meeting. Upon the demand of any

director, trustee, stockholder or member, the time when

any director, trustee, stockholder or member entered or

left the meeting must be noted in the minutes; and on a

similar demand, the yeas and nays must be taken on any

motion or proposition, and a record thereof carefully

made. The protest of any director, trustee, stockholder or

member on any action or proposed action must be

recorded in full on his demand.

The

records

of

all

business

transactions

of

the

corporation and the minutes of any meetings shall be

open

to

the

inspection

of

any

director,

trustee,

stockholder or member of the corporation at reasonable

hours on business days and he may demand, in writing,

for a copy of excerpts from said records or minutes, at his

expense.

Any officer or agent of the corporation who shall

refuse

to

allow

any director, trustee, stockholder or

member of the corporation to examine and copy excerpts

from its records or minutes, in accordance with the

provisions of this Code, shall be liable to such director,

trustee, stockholder or member for damages, and in

addition, shall be guilty of an offense which shall be

punishable under Section 144 of this Code: Provided , That

if such refusal is pursuant to a resolution or order of the

Board of Directors or Trustees, the liability under this

section for such action shall be imposed upon the

directors or trustees who voted for such refusal: and

Provided , further , That it shall be a defense to any action

under

this

section

that

the

person

demanding

to

examine

and

copy

excerpts

from

the

corporation's

records

and

minutes

has

improperly

used

any

information secured through any prior examination of the

records or minutes of such corporation or of any other

corporation, or was not acting in good faith or for a

legitimate purpose in making his demand.

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 bylaws 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.

No stock transfer agent or one engaged principally in

the business of registering transfers of stocks in behalf of

a stock corporation shall be allowed to operate in the

Philippines

unless

he

secures

a

license

from

the

Securities and Exchange Commission and pays a fee as

may be fixed by the Commission, which shall be renewed

annually:

Provided ,

That

a

stock

corporation

is

not

precluded from performing or making transfer of its own

stocks,

in

which

case

all

the rules and regulations

imposed on stock transfer agents, except the payment of

a license fee herein provided, shall be applicable. (51a and

32a; P.B. No. 268.)

SECTION

75.

Right

to

Financial Statements . —

Within ten (10) days from receipt of a written request of

any stockholder or member, the corporation shall furnish

to him its most recent financial statement, which shall

include a balance sheet as of the end of the last taxable

year and a profit or loss statement for said taxable year,

showing in reasonable detail its assets and liabilities and

the result of its operations.

At the regular meeting of stockholders or members,

the board of directors or trustees shall present to such

stockholders

or

members

a

financial

report

of

the

operations of the corporation for the preceding year,

which shall include financial statements, duly signed and

certified by an independent certified public accountant.

However, if the paid-up capital of the corporation is

less than P50,000.00, the financial statements may be

certified under oath by the treasurer or any responsible

officer of the corporation. (n)

TITLE IX Merger and Consolidation

SECTION 76. Plan of Merger or Consolidation . — Two

or

more

corporations

may

merge

into

a

single

corporation

which

shall

be

one

of

the

constituent

© Compiled by RGL

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