Mr. Francisco A. Barretto

July 6, 1988 Mr. Francisco A. Barretto FAB Rent-A-Car 73 National Road Lower Kalakalan Olongapo City Sir : This refers to your letter dated June 22, 1988 requesting clarification on the following queries: 1. If a stockholder has formally ceded, assigned, transferred and conveyed his shares of corporation to another individual, is it necessary for the transferor/transferee to report the transfer to the SEC? 2. Or is it necessary for the Corporate Secretary or transfer agent to inform the SEC? 3. Is there any SEC regulation or Corporate Law requirement on the matter? 4. If there is such a requirement under existing law or SEC regulation, is there a prescriptive period to report the same? The Commission, in a previous opinion, has ruled that a corporation is not required to secure the approval of the SEC for the transfer of shares of its stocks because the same is an internal affair which can be resolved by the corporation itself. ( SEC Opinion dated September 29, 1964 ). However, to be valid as against third persons, the transfer must be recorded in the proper books of the Corporation. The pertinent provisions of the Corporation Code provide, thus: "SECTION 63. ...No transfer, however, shall be valid, except as between the parties, until the transfer is recorded in the books of the corporation so as to show the names of the parties to the transaction, the date of the transfer, the number of certificate or certificates and the number of shares transferred . No shares of stock against which the corporation holds any unpaid claim shall be transferred in the books of the corporation." "SECTION 74. Books to be kept . xxx xxx xxx Stock corporations must also keep a book to be known as the "stock and transfer book",in which must be kept a record of all stocks in the names of the stockholders alphabetically arranged; the installment paid and unpaid on all stock for which subscription has been made, and the date of payment of any installment; a statement of every alienation, sale or transfer of stock made, the date thereof, and by and to whom made; ...(emphasis supplied) cdll Please be advised accordingly. (SGD.) JULIO A. SULIT, JR. Chairman