Published — December 21, 2020
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
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.
More on corporation aside from securities: WHAT ARE THE POWERS OF A STOCK CORPORATION?
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Securitieslare shares, participation or interest in a corporation
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Securitieslare evidenced by a certificate, contract, instruments, whether written or electronic in character
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Securities, when not registered, are not to be offered for sale
May securitieslbe sold?
First, what is meant by securities?
The law says:
Securities are shares, participation or interests in a corporation or in a commercial enterprise or profit-making venture and evidenced by a certificate, contract, instruments, whether written or electronic in character. It includes:
- Shares of stocks, bonds, debentures, notes evidences of indebtedness, asset-backed securities;
- Investment contracts, certificates of interest, participation in profit sharing agreement, certifies of deposit for a future subscription;
- Fractional undivided interests in oil, gas or other mineral rights;
- Derivatives like option and warrants;
- Certificates of assignments, certificates of participation, trust certificates, voting trust certificates or similar instruments;
- Proprietary or nonproprietary membership certificates in corporations; and
- Other instruments as may in the future be determined by the Securities and Exchange Commission.
It is interesting to know that investment contracts, as one of the forms of securities mentioned above, has been defined as a contract, transaction or scheme, where a person invests his money in a common enterprise and is let to expect profits primarily from the efforts of others. Also, an investment contract is presumed to exist whenever a person seeks to use the money or property of others on the promise of profits and a common enterprise is deemed created when two (2) or more investors “pool” their resources creating a common enterprise, even if the promoter receives nothing ore than a broker’s commission.
Now, going back to the first question above, “May securities be sold?”
The law says:
Yes.
However, a person is not allowed to engage in the business of buying or selling securities in the Philippines as a broker or dealer, or act as a sales man, or an associated person of any broker or dealer unless registered as such with the Securities and Exchange Commission.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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