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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.
AT A GLANCE:
Section 72 of the Revised Corporation Code (RCC) provides for the procedure that a corporation must follow in issuing new certificates of stock in lieu of those which have been lost, stolen or destroyed.
A stock certificate is considered as the prima facie evidence that the holder is a shareholder of a corporation. It is the paper representative or the tangible evidence of the stock itself and of various interests therein. (Grace Insigne, et al. v. Abra Valley Colleges, Inc., G.R. No. 204089, July 29, 2015)
The Revised Corporation Code (RCC) provides for the procedure that a corporation must follow in issuing new certificates of stock in lieu of those which have been lost, stolen or destroyed.
- Affidavit by the shareholder
Section 72 of the RCC states that:
“The registered owner of a certificate of stock in a corporation or such person’s legal representative shall file with the corporation an affidavit in triplicate setting forth, if possible, the circumstances as to how the certificate was lost, stolen or destroyed, the number of shares represented by such certificate, the serial number of the certificate and the name of the corporation which issued the same. The owner of such certificate of stock shall also submit such other information and evidence as may be deemed necessary.”
- Verification and publication of notice by the corporation
Section 72 of the RCC states that:
“After verifying the affidavit and other information and evidence with the books of the corporation shall publish a notice in a newspaper of general circulation in the place where the corporation has its principal office, once a week for three (3) consecutive weeks at the expense of the registered owner of the certificate of stock which has been lost, stolen or destroyed.
Contents of the Notice
The notice shall state the following:
- the name of the corporation,
- the name of the registered owner,
- the serial number of the certificate
- the number of shares represented by such certificate, and
- a statement that after the expiration of one (1) year from the date of the last publication, if no contest has been presented to the corporation regarding the certificate of stock, the right to make such contest shall be barred and the corporation shall cancel the lost, destroyed or stolen certificate of stock.
- Presentation of contest within the waiting period of one (1) year
The law says:
“After the expiration of one (1) year from the date of the last publication, if no contest has been presented to the corporation regarding the certificate of stock, the right to make such contest shall be barred and the corporation shall cancel the lost, destroyed or stolen certificate of stock.”
- Replacement of certificate
If there is no contest presented to the corporation regarding the certificate of stock, after the expiration of one (1) year from the date of the last publication, the corporation shall cancel the lost, destroyed or stolen certificate of stock.
Loss of stock certificate due to the fault of the corporation
The procedure prescribed in Section 72 is not applicable in a proceeding to compel the issuance of a certificate to one in whose favor none was ever issued by the corporation or where the certificate was lost by the corporation.
When there is a clear proof that the original had been destroyed or where the certificate was lost by the corporation itself by carelessness, the corporation may be compelled to use a new certificate. (SEC Opinions dated January 8, 1990 and June 11, 1990)
Read also: Everything You Need to Know on Stocks and Shares Under the Law
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