Mr. Avelino J. Aguilar

October 29, 1999 Mr. Avelino J. Aguilar Masbate Consolidated Arrastre Incorporated Port Area Masbate; Masbate S i r : This refers to your letter dated October 27, 1999 requesting opinion on whether or not, pending receipt of the certificate of SEC approval of an application for increase of authorized capital stock, a corporation can issue certificates of stock to the new subscribers to the increase and whether or not the majority stockholders of record after the increase can call for a special meeting to elect new sets of board of directors and corporate officers. The Corporation Code provides: "SECTION 38. Power to increase or decrease capital stock ; ... ...From and after the approval by the Securities and Exchange Commission and the issuances by the Commission of its certificate of filing the capital stock shall stand increased or decreased ..." (Emphasis supplied) It is clear from the above provision that an increase in the authorized capital stock of a corporation shall be effective only upon the approval and issuance of the certificate of filing by the Commission. Accordingly, the above queries are both answered in the negative. Very truly yours, (SGD.) DANILO L. CONCEPCION Associate Commissioner