ratified by at least2
TRANSCRIPT
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Ratified by atleast2/3 of the
OCSS E C I N TE R I M GUIDELIN
ESCorporation must
have:
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Minimum net
worthof P25 Mat the time of the
filing of theapplication
H a v e b e e n i noperat ion for at l
east 3 years
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Must fulfill
financialratio mandated bySEC in
interimguidelinesrequired:1)trust indenturewith a trusteebank2)underwritingagreeme
nt
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Bonds registered
with theSECPower to sell,
dispose,lease, encumber (Sec.40)ALL
Quantitative TestS
UBSTANTIALLYALL
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Qua l i t a t i ve Tes t (purpose for w
hich itwasincorporated)1 )O f a l l o r s
ubstantially all of its property
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Majority vote of
Board of Directors( m a j o r i t y o f
quorum)
R a t i f i e d o r a
pproved by 2/3of the OCS or
2/3 of themembers
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Re la tes t o t heprimary
purpose.2)Exception to Sec.40 if the sale
isnecessary in theusual and regu
larcourse of businessor if proceed
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s of the sale or
otherdisposition of suchproperty and
assetsbeappropriatedforthe conduct ofitsremainingbusinesses
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Majority vote of
Board of Directors(business
judgmentrule
Does not relate t
op r i m a r y o r secondary
purpose( 1 ) M u s
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t comply with
theBulk Sales Law
L i s t i n g t h e corporate creditorsand the amount
and nature oftheirclaims
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Fai lure renderst
ransactionvoid(2) If no ratifi
catoryvote ofstockholders, itisan utra vires actof the thirdkind Yes, such a
sale doesnotnecessarily leas
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toa dissolution of
thecorporation andreturnof the
residual valueof the corporation.Such isafforded asa matter of equityand
fairness.Power topurchase
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ownshares (Sec.
41)Buy back ofshares
(i)decrease the cost of doing business (ii)perpetuate control of theenterprise.
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Must be for a
legitimate purpose
example:(1)eliminate fractionalshares arisingoutof stockdividends(2)coll
e c t o r c o m p r omise anindebte
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dness to the cor
porationarisingout of unpaid
subscription inadelinquency sale, and to purchasedelinquent sharesduring said sale
and(3)to pay dis
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senting or withdr
awingNone
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Revised BagtasReviewer by Veand
Ocfe 2Astockholders exercising th
eirappraisal right
Taken from
URE only exceptredeemableshares
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P o w e r t o i n v e
s t corporate funds inanother
corporationorbusiness or foranyother purpos
e (Sec.42)
Approved by amajority vote of t
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h e B o a r d o f D
irectors (majorityofquorum)
Ratified by atleast2/3 of the
OCS
As a generalrule,section 42
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appliesif the inves
tmentis forsecondary
orother than theprimary purpose.
E x c e p t i f t h e inves tmen t is re
asonablynecessa r y t o accompli
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sh i tsprimary pur
poseas stated intheA r t i c l e s o
f Incorporation,approval of thestockholders isnotnecessary as itisincluded in th
eBusinessJudgmento f B o
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a r d o f Director
s
Written notice oft h e p r o p o s e d investment andth
e time andplaceof meeting s
hallbe addressedtoeach stockhold
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eror member at
hisplace ofresidenceas sho
wn in theb o o k sof thecorpora t
ion anddepositedto theaddressee
in thePost Office
withpostageprepaid orserved
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personally. Yes, b
ecause minustheratificatory votet
h e c o n t r a c t o r transaction fallsunderthe realmof ul travires transactions of the
thirdtype.Power to d
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eclaredividends
(Sec. 43)
Cashdividends(1)Absolutemajor i t y o f B
o a r d o f Directors
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inaccordancew i t
h t h e BusinessJudgment Rule(2)
Only declaredoutof the UREwhich shallbepayable in cash,inproperty or in
stock(3) However, cashdividend
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s due ondelinqu
ent sharesshallbe first appliedto
the unpaidbalancewhile stock dividendsshallbe withhelduntilfully paid
Stock dividends
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approval of 2/3of
Sec. 43 prohibitsstock corporationf
rom retain ingsurplus profits inexcess of 100%of t he i r pa id -
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up capi ta l s tock
,EXCEPT:(1) When justi f ied byd
efinitecorporateexpansionprojectso rprograms asapproved bytheBoard of Director
s(2) Whencorporationis pro
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hibited underany
loan agreementfr o m d e c l a r i n g
dividends withoutitsconsent andsuch Yes.113
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t h e O C S a ta regular or specialmeeting called f
orthatpurpose.consent
has not yetbeensecuredor(3) When i t ca
n beclearly shownthat
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suchretention is n
ecessaryu n d e rs p e c i a l circumst
ancesobtainingi n t h e corporation such aswhenthere is needforspecial reser
ve forprofitablecontingencies.Powe
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r to enter intoma
nagementcontracts(Sec. 44)
Approved byabsolute majority
of the BoardofDirectors
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Approved by
stockholdersowning majority
of theOCSHOWEVERwhere:(1)Stockholdersrepresenting the
same interestofboth managing
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and the managed
corporationown orcontrol more than
1/3 of the totalOCSentitled tovote of themanagingcorporation
OR(2) Where a majority of the me
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mbers of theBoar
d of Directors ofthe managing
corporationalsoconstitute amajority of themembers oftheBoard of
Directors of themanaged
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corporation. Then
it must beapproved by the
stockholders of themanagedcorporationowning at least2/3 of the
OCSEXCEPT ifthe corporation is
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organized
primarilyasmanagement
company.
Not for a period
longer than fiveyears for anyone
term.
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