REPUBLIC ACT No. 11232 . An Act Providing for the Revised Corporation Code of the Philippines

CASE STUDY. Cite the applicable provision in your explanation.

1. The board of directors of Lopez Realty, Inc. passed a resolution providing gratuity pay for its employees in a special meeting called for the purpose. At the time, however, Asuncion Lopez Gonzales (a member of the board), was still out of the country. Asuncion assailed the validity of the said board resolution contending that the same was ultra vires on the ground that she was not duly notified of the special meeting in which it was passed. Is the disputed board resolution ultra vires as urged by Asuncion? Explain.

2. X Corporation has already issued the 1000 originally authorized shares of the corporation so that its Board of Directors and stockholders wish to increase X's authorized capital stock. After complying with the requirements of the law on increase of capital stock, X issued an additional 1000 shares of the same value. Assume that stockholder A presently holds 200 out of the 1000 original shares. Would A have a preemptive right to 200 of the new issue of 1000 shares? Why?

3. Divine Corporation, engaged in the manufacture of garments for export, was able to obtain loans from individuals and financing institutions. However, due to the drop in the demand for garments in the international market, Divine Corporation could not meet its obligations. It decided to sell all its equipment such as sewing machines, perma press machines, high-speed sewers, cutting tables, ironing tables, etc., as well as its supplies and materials to Top Grade Fashion Corporation, its competitor.

a. How would you classify the transaction?

b. Can Divine Corporation sell aforesaid items to its competitor, Top Grade Fashion Corporation? What are the requirements to validly sell the items? Explain.

4. During the annual stockholders meeting, Riza, a stockholder proposed that a part of the corporation's unreserved earned surplus be capitalized and stock dividends be distributed to the stockholders, arguing that as owners of the company, the stockholders, by a majority vote, can do anything. As chairman of the meeting, how would you rule on the motion to declare stock dividends? Explain.