Ms. Catalina O. Dacanay
SEC Opinion • Securities and Exchange Commission • Opinions • Jul 10, 1991
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July 10, 1991 Ms. Catalina O. Dacanay White Beach Resort, Inc. Philippine Village Hotel Pasay City, Metro Manila M a d a m : This refers to your letter of July 3, 1991 requesting opinion on the following: 1. Validity of an increase in capital stock which has been approved by the directors and stockholders but has not yet been approved by the Securities and Exchange Commission. 2. The legal effects of the above-mentioned corporate act on the subscription contracts covering the exchange of stocks for the properties and cash of the prospective subscribers. Section 38 of the Corporation Code provides that the increase in capital stock shall become legally effective only upon approval by the Commission. The Law provides thus: LexLib "From and after the approval by the Securities and Exchange Commission of its certificate of filing, the capital stock shall stand increased ..." Accordingly, subscribers to an increase of capital stock cannot be accorded the rights pertaining to a regular stockholder until the increase shall have been approved by the Commission pursuant to the above provision of Law. Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman
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