Mr. Delfin L. Sanque

October 8, 1980 Mr. Delfin L. Sanque Public Market, Isulan Sultan Kudarat-9328 Sir : This has reference to your letter dated May 20, 1980, requesting opinion of this Commission on the query posed therein. It appears from your letter that your employer granted you stock bonuses for services rendered as of December 1973 at the rate of one (1) share for every two (2) years of service. He, however, disallows or discourages the sale of said stock unless you resigned from employment and, furthermore, restricts its sale to any of his employees only. You wish to know if said action of your employer is legal. In connection therewith, please be informed that "shares of stock in a corporation are personal property, and, as in the case of other personal property; the owner has an absolute and inherent right, as an incident of ownership to sell and transfer the same at will except insofar as the right may be restricted by the charter of the corporation or the general law . . . ." (Emphasis supplied). You failed to mention the name of your employer-corporation, hence, we did not have the chance to find out whether its articles of incorporation contains such a restriction. Assuming that there is no restriction in the articles of incorporation, "a bonafide transfer does not require the consent of the corporation, and cannot be prevented by it or by its officers." (12 Fletcher Cyclopedia Corporation, Sec. 5452) SEC Folio, p. 238. This well-settled doctrine is embodied in our Corporation Code of the Philippines which explicitly provides as follows: "SECTION 63. ...Shares of Stock so issued are personal property and may be transferred by delivery of the certificate or certificates indorsed by the owner or his-attorney-in-fact or other person legally authorized to make the transfer ...." At any rate, please be advised that in order to legally effect restrictions on the right to transfer shares of stock, such restrictions must be provided for in the articles of incorporation as well as printed in the certificates of stock. (SEC Folio, p. 217) llcd Please be guided accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Director Corporate and Legal Department