International Air Transport Association

March 18, 1993 International Air Transport Association Tanglin P.O. Box 0206 Singapore 9124 Attention : Mr . Chua Soon Keow S i r : This refers to your letter of November 26, 1992 requesting information as to the SEC requirements for increase in the paid-up capital of a corporation. In case of increase of paid-up capital thru payment of unpaid subscriptions, prior approval of the SEC is not necessary, provided that the additional payment consists of cash. Where the payment is in the form of property other than cash, approval of the Commission is required pursuant to the provision of Section 62 of the Corporation Code of the Philippines quoted in part hereunder: "Where the consideration is other than actual cash or consists of intangible property such as patents or copyrights, the valuation thereof shall initially be determined by the incorporators or the board of directors, subject to the approval by the Securities and Exchange Commission . (Emphasis Supplied) Where the increase in the paid-up capital is by way of issuance of unissued shares of the authorized capital stock, the corporation, whose shares of stock are not registered under the Revised Securities Act, must secure from the Commission prior exemption from registration requirements under said Act. Where the increase of paid-up capital is in connection with an increase of authorized capital stock, the corporation must comply with the requirements laid down under Section 38 of the Corporation Code. Enclosed herewith are lists of SEC Requirements for (a) issuance of shares out of the unissued authorized capital stock and (b) increase of authorized capital stock under Section 38 of the Corporation Code. LibLex Please be guided accordingly. Very truly yours, (SGD.) RODOLFO L. SAMARISTA Associate Commissioner