Shares

• Section 6 of the Corporation Code state that the shares of stock may be divided into classes or series of shares (or both), and any of which may have rights (privileges of restriction as may be stated in Art. of Incorporation) provided that no share may be deprived of voting rights, except those classified and issued as preferred shares.
• Voting Shares - those entitled to vote in all business matters affecting the corporation which require the vote of the stockholders
• Non-Voting Share as a rule is not allowed to vote except in the following cases:

  • amendment of Articles of Incorporation
  • amendment or repeal of Bylaws
  • sale of all or most of corporate property
  • increase or decrease of capital stock
  • investment of corporate funds in other businesses
  • dissolution of the corporation
• Par Value Stock - a share that is fixed in the Articles of Incorporation. It establishes the nominal value per share and it is the minimum amount that must be paid by each stock holder.
• No Par Value Share - a share with no par amount stated in the stock certificate.
• Ordinary Share (Common Stock) - is a class of ownership that has no special preference over any other class of stock. Its' return of investment depends on the operations of the corporation.
• Preference Share (Preferred Stock) - possesses preferential rights and is usually issued with a par value and the dividend is expressed as a percentage of the par value.
• Promotion Shares - issued to promoters and entrepreneurs for services rendered to the organization, promotion, and launching of the business.
• Treasury Shares - shares that have been issued as fully paid and later reacquired by the corporation through purchase, redemption, donation, or other lawful means.


  Section 9 states that these shares may be disposed of again for a reasonable price fixed by the board of directors.
• Escrow Shares - shares of stock subject to an escrow agreement wherein the stocks are deposited by the seller with bank or third party, and is to be delivered by said bank to the buyer, only upon the fulfillment of a stipulated suspension condition
• Founder's Shares of Stock - issued to the founders of the corporation and enjoys certain rights and privileges stipulated in the Art. of Incorporation and is not ordinarily given to other stocks.
• Callable Shares - are usually preferred shares that can be redeemed at a specified price.
• Preferred Share as to Dividends - the shareholder is entitled to receive dividends to the extent agreed upon before any dividends are given to ordinary shareholders.
• Cumulative Preference Share - entitles its holder to receive payments not only of current dividends but dividends arrears (unpaid in previous years).
• Non-cumulative preference share -entitles the holder of the receipt of the current dividend only upon declaration and does not give right to unpaid dividend from prior year.
• Participating Preference Share - gives the shareholder the privilege to participate in profits beyond his fixed rate of return.
• Non-participating preference share - entitles the holder to receive preferred dividends stipulated but the balance, if any, is given entirely to ordinary shares.
• Preferred Shares as to Asset - gives the holder preference in the distribution of asset of the corporation in case of dissolution.
• Convertible Preference Share - gives the holder the option to change the stock for some other security of the issuing corpotation
• Callable Preference Share - can be called in for redemption at a specified price at the option of the corporation and is presented as part of Shareholders' equity.
• Redeemable Preference Share is a preference share with mandatory redemption or is redeemable at the option of the holder. It is presented as a liability in the SFP.