Atty. Pacifico B. Tacub
SEC Opinion • Securities and Exchange Commission • Opinions • Aug 19, 1983
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August 19, 1983 Atty. Pacifico B. Tacub 135-R Lourdes Drive San Juan, Metro Manila Sir : This has reference to your letter dated August 8, 1983, requesting opinion of this Commission on whether the subscribed capital stock of a corporation can be paid thru stock dividends. The pertinent provision of the Corporation Code provides, in part, as follows: "SECTION 62. Consideration for stocks ....Consideration for the issuance of stock may be any or combination of any two or more of the following: xxx xxx xxx 5. A mounts transferred from unrestricted retained earnings to stated capital; xxx xxx xxx" The abovequoted provision of law refers to stock dividends which are described; thus, when stocks are issued in consideration of profits earned but not distributed, the stocks so issued are called stock dividends. (Agbayani, Commentaries, p. 453). The answer to your query, therefore, is in the affirmative. Please be guided accordingly. LibLex Very truly yours, (SGD.) GONZALO T. SANTOS, JR. Associate Commissioner
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