Published — June 1, 2022
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
Read also: RIGHTS OF STOCKHOLDERS IN A DISSOLVED CORPORATION
-
Stockholders are entitled to dissent and demand payment of the fair value of their shares.
-
Stockholders have the right to vote, receive dividend, and inspect corporate books.
-
Stockholders are entitled to institute derivative suit.
Stockholders are part owners of the corporation. To be able to fully enjoys their shares, they must know their rights as stockholders.
The Revised Corporation Code provides that:
Stockholders are entitled to appraisal right. This is a right that allows stockholders to dissent and demand payment of the fair value of the shares in cases provided by law. Also, stockholders are entitled to vote. However, the right of the members of any class or classes to vote may be limited, broadened, or denied to the extent specified in the articles of incorporation or the bylaws. In addition, have the right to inspect corporate books or demand reproduction of corporate records.
Also, stockholders have remedial rights. They can institute derivative suit to redress wrongs committed against the corporation or to protect or vindicate corporate rights, whenever the officials of the corporation refuse to sue or are the ones to be sued or hold control of the corporation.
Philippine Jurisprudence says:
In the case of Ago Realty & Development Corporation (Ardc), Emmanuel F. Ago, And Corazon Castañeda-Ago v. Dr. Angelita F. Ago, Teresita Paloma-Apin, And Maribel Amaro, G.R. No. 211203, October 16, 2019, the court ruled that, “Grounded on equity, the derivative suit has proven to be an effective tool for the protection of minority shareholders. Such actions have for their object the vindication of a corporate injury, even though they are not brought by the corporation, but by its stockholders.”
Securities and Exchange Commission (SEC) Opinion dated October 10, 1992 and July 16, 1996 provides that:
It is the right of the stockholder to demand payment of dividends after the board’s declaration. Stockholders are entitled to dividends pro rata based on the total number of shares that they own.
Accordingly, stockholders are entitled to proprietary rights such as right to receive dividend, right of appraisal, right to inspect corporate books, and right to vote. Further they are entitled to institute derivative suit to protect or vindicate corporate rights.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
All rights reserved.
SUBSCRIBE NOW FOR MORE LEGAL UPDATES!
[email-subscribers-form id=”4″]
Amazing! This blog looks just like my old one! It’s on a completely different topic but it has pretty much the same page layout and design. Wonderful choice of colors!
WONDERFUL Post.thanks for share..more wait .. ?
As a stockholder of a hospital, this pandemic unavailability of rooms in the admission and emergency room, do stockholders have a right to be given a first aid in emergency cases as in difficulty of breathing and oxygen is below level?