Mr. Rodolfo D. Cruto

May 23, 1994 Mr. Rodolfo D. Cruto Solid Packaging Philippines, Incorporated No. 14 Sunag Street, Mandaluyong, Metro Manila S i r : This refers to your letter of May 5, 1994 inquiring on what should be the basis of computing dividends, whether it should be based on the total subscription or only on the amount paid therefor. The pertinent provisions of the Corporation Code provide: "SECTION 43. Power to declare dividends . The board of directors of a stock corporation may declare dividends out of the unrestricted retained earnings which shall be payable in cash, in property, or in stock to all stockholders on the basis of outstanding capital stock held by them .Provided, That any cash dividend due on delinquent stock shall first be applied to the unpaid balance on the subscription plus costs and expenses, while stock dividend shall be withheld from the delinquent stockholders until his unpaid subscription is fully paid: ...." (Emphasis supplied) "SECTION 72. Rights of unpaid shares . Holders of subscribed shares not fully paid which are not delinquent shall have all the rights of a stockholder ." (Emphasis supplied) It is clear from the aforecited provisions that the stockholder's participation in dividends is based on his total subscription and not on the amount paid by him on account thereof. cdll Please be advised accordingly. Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner