Atty. Teresita Oledan

May 13, 1981 Atty. Teresita Oledan 169 Roosevelt Avenue SFDM, Quezon City Dear Atty. Oledan: This is in connection with your letter of January 15, 1981 regarding the unlimited and joint undertaking which the SEC requires of stockholders of corporation engaged in the business of buying and selling shares or doing business in the stock market. Your query is whether said undertaking covers the ordinary obligations of the corporation to its creditors, such as ordinary corporate loans or should be confined only to the transactions or dealings of the corporation involving its investors. You advanced the opinion that it should cover only transactions with investors to give life to the basic principle that a stockholder's liability is limited to his shareholding in the corporation. We regret to inform you that we cannot subscribe to your opinion for two reasons. Firstly, it is against the SEC Opinion dated February 8, 1948 (copy enclosed) which does not distinguish between liability or dealings of the corporation to non-investors and investors. Said opinion is still subsisting and has not been superseded. Secondly, considering the present depressed state of the stock market and the good purposes for which the 1948 rules (Opinion) were established, the Commission does not believe that there is a necessity to distinguish transactions or dealings of the corporation to investors and non-investors in order to safeguard the interest of the public especially from high-financed brokers. Please be guided accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Director Corporate and Legal Department