Question

A,B,C,D,E and F, Filipino citizens , X,Y,Z, Amrican citizens, and R&S Japanese citizens agreed to form a domestic corporation with an authorized capital stock of P1,000,000 divided into one hundred thousand shares with a par value of P10 per share. B subscribed for 2,000 shares and he paid P12,000. X subscribed for 5,000 shares and he issued a promissory note in the amount of P30,000. F joined the group but he did not subscribe for any number of shares.

Assuming that the corporation has been organized, how many shares can B validly vote in the election of the members of the board of directors?
A. 1,200 shares because these have been paid
B. 2,000 shares because that is his total subscriptions
C. 800 shares because that is the balance of his unpaid subscription
D. Any of the above

Answer 1

B can validly vote the 1,200 shares that have been paid for at P10 per share since this represents the portion of the subscription that has been settled. Unpaid shares typically do not confer voting rights until they are fully paid. Option A.

Step-by-step explanation:

When considering the number of shares a shareholder can validly vote in a corporation, it typically depends on the amount of paid shares.

For the case presented, B subscribed for 2,000 shares at P10 per share, which amounts to P20,000 in total. B has paid P12,000, hence, B can vote the fully paid portion of their shares. In this scenario, at P10 per share, B has paid for 1,200 shares.

The correct response would be that B can validly vote the 1,200 shares that have been paid for. While B subscribed to 2,000 shares, in terms of voting power, only the paid shares are typically considered. The unpaid portion does not generally bestow voting rights until settled.

If the corporation operates under different rules where subscribed shares can be voted regardless of payment, B could potentially vote all 2,000. However, the standard practice would be on the basis of the paid-up capital. So Option A.