Pacific Ventures For Agricultural and Mineral Resources, Inc.

October 24, 1986 Pacific Ventures For Agricultural and Mineral Resources, Inc. 37 Nicanor Reyes St., Loyola Heights Diliman, Quezon City Attention : Mr . Anselmo O . Angeles President Gentlemen: This relates to your letters, dated June 23 and September 16, 1986, requesting the opinion of this Commission on the queries posed therein. LexLib The facts presented in your letters, are: Pacific Ventures for Agricultural and Mineral Resources, Inc. was registered with this Commission in July, 1984. After incorporation, the principal stockholders/officers who are all professional engineers and architects got employed in Nigeria. Consequently, the corporation was in-operation from 1984 to 1985. At present, you alleged that these stockholders/officers of Pacific Ventures are finally home. Now, your company intends to enter into a joint venture with Nigerian investors, resulting in the formation of a corporation to be registered in Lagos, Nigeria. Tentative projects of the proposed corporation will involve improved methods of solar salt production, manufacture of adhesives, fabrication of low-cost transport vehicles and others. Nigerian investors shall contribute cash/property to the capital of the proposed corporation, while Pacific Ventures shall contribute professional services and technology transfer. With the above set-up, your queries are: 1. Can you take up in your book as investment your shareholdings in the proposed corporation at such value as may be determined jointly by the Filipino and Nigerian groups? 2. May your stockholders apply the joint venture investment as payment of their unpaid subscription to Pacific Ventures? The answer to your first query is in the affirmative, provided that the value of the technology and the professional services involved in the joint venture operation has already been agreed upon by the joint venture parties, and that the covering shares of stock of the joint venture company have already been issued to the domestic corporation. Anent your second query, please be informed that the shareholding of Pacific Ventures in the joint venture company in Lagos, Nigeria, represents its investment. As such, it becomes part of the assets of Pacific Ventures. In this connection, the capital and assets of Pacific Ventures are its property and the shares evidenced by the stock certificates are property of the holders, which do not carry the capital property or any profits until they have been declared and vested as dividends, after which they are stockholders' property. Thus, earnings and profits still in the possession of a corporation belong to the corporation and same as its property generally and there is nothing due or owing a stockholder as a matter of debt or property until a dividend is declared in an appropriate manner. (1 Fletcher, Cyc Corps., 1963 Rev. Vol. sec. 31, pp. 135-137). Your second query is therefore answered in the negative. Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman