In stock corporations, except for those shares of stock classified as “preferred” or “redeemable” shares, each share of stock as classified under Section 6 of the Corporation Code of the Philippines is entitled to vote, unless denied in the articles of incorporation or declared delinquent under Section 67 of the same Code.  Also, except as otherwise provided by the articles of incorporation and stated in the certificate of stock, each share shall be equal in all respects to every other share.

Under Section 6 of the Corporation Code, it can likewise be construed that common shares cannot be deprived of voting rights.  The fact that the shares are denominated as common shares and have the same par value would suppose that they are to be treated in equal footing (SEC Opinion Letter to Atty. Orcullo dated December 12, 1996).

Where the articles of incorporation and the certificate of stock are silent on the matter of voting rights, all issued shares, regardless of their class nomenclature, shall be considered to have equal voting rights (SEC Opinion Letter to Mr. Otsuki dated July 16, 1996).  The Corporation Code is explicit that the moment a stock becomes delinquent, the holder thereof loses his right to vote.  The Corporation Code provides that no delinquent stock shall be voted for or be entitled to vote or to representation at any stockholders’ meeting (Section 71, Corporation Code).

Most statutes provide that a stockholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred (Model Bus Corp. Act & 31 (8) cited in Fletcher Cyclopedia Corporations, Vol. 5, p; 177).

Even when shares are on the books in the name of the pled-gee, he has not the title, as the right to vote is in the pledgor, in the absence of agreement to the contrary (Fletchers, Vol. 5 p. 178 citing Italo Petroleum Corp. v. Producers’ Oil Corp., 20 Del. Ch. 283, 174 A 276).

The right to vote at a stockholders’ meeting depends upon the ownership of the stock as disclosed by the stock and transfer book [repeat: stock and transfer book] of the corporation, and a registered stockholder must be allowed to vote irrespective of any question of bona fides (Fletcher, Supra, Sec. 2023).  Therefore, mere possession of the stock certificate, even if in the name of the holder, does not per se, give the right to vote such stock. Treasury shares, on the other hand, shall have no voting rights as long as such stock remains in treasury (Sec. 57, Corporation Code of the Philippines).  In this connection, whenever the general corporation law disqualifies shares from voting on any matter, they are not considered outstanding for the determination of a quorum at any meeting to act upon, or the required vote to approve action upon, that matter under any other provision of the general corporation law or articles or bylaws (Ballantine & Sterling, California Corporation Law, Vol. 1A, 1982 ed., sec 171.01 at 9-32).

THE Lopez family would definitely bid for the entire 29-percent stake of the government in the country’s largest power utility Manila Electric Co. (Meralco).The equity is up for sale in the next quarter.

Ominicom eyes business prospects in RP

OMNICOM Group Inc. is closely monitoring customer relationship management as a revenue source, said its Asia-Pacific head, who flew to Manila to look at business potentials in the country.

COMMUNITY Innovations, the upper mid-end unit of Ayala Land Co., launched Tuesday its new HomeStarter financing scheme that is seen to help improve the company’s revenue growth to 75 percent this year.

IT’S all systems go for the planned public offering of Aboitiz Power Corp. The Philippine Stock Exchange board approved late Monday the company’s application to go public.