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.

Can B demand for a certificate of stock of 1,200 shares?
A. No, because certificate of stock shall be issued onlyafter payment of the full amount of the subscription
b. No, because the 800 shares subscribed by him are already delinquent
C. Yes, because he can surrender the 800 shares to the corporation and limit his subscription to 1,200 shares only
D. Yes, because he has paid P12,000 representing the full value of 1,200 shares

Answer 1

B can demand a stock certificate for 1,200 shares since he has fully paid for them, even if he subscribed for more shares. He is entitled to this certificate based upon payment for the exact number of shares he has fully covered.

Step-by-step explanation:

The student's question asks whether B can demand for a certificate of stock for 1,200 shares after having paid P12,000 even though B subscribed for 2,000 shares with a par value of P10 each in the new corporation being formed by a combination of Filipino, American, and Japanese citizens. According to most corporate regulations, shareholders are entitled to a stock certificate only after they have paid the full amount of their subscription. Since B has paid P12,000, he effectively has paid for 1,200 shares in full (1,200 shares x P10 per share par value). Therefore, B can indeed demand a certificate for 1,200 shares, and the payment for the remaining 800 shares would remain outstanding unless further arrangements are made or the payment is completed.

This situation can be likened to cases where investors purchase stock in a company, which represents partial ownership. Stockholders are not fully liable beyond their investment if a corporation experiences failure. This principle applies until the full subscription amount is settled, aligning with the option that correctly answers the student's question.