Corporate Property Sale Philippines
In the Philippine corporate landscape, the sale of a property owned by a corporation involves several legal intricacies, including the voting requirement needed to authorize such a transaction. Under the Corporation Code of the Philippines, the sale, lease, exchange, or disposition of all or substantially all of a corporation's properties and assets, including goodwill, requires the affirmative vote of the board of directors and the vote or written assent of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock.
Board Approval
Firstly, the board of directors must convene to discuss and approve the proposed sale. The board's role is critical because they are elected to manage the corporate assets for the benefit of the shareholders.
Shareholder Consent
Following board approval, the next step is to secure shareholder consent. According to the Corporation Code, a vote or written assent from shareholders owning at least two-thirds of the outstanding capital stock is necessary. This provision essentially gives minority shareholders a considerable voice in significant corporate decisions, including asset disposition.
Dissenters' Rights
It's important to note that shareholders who disagree with the proposed transaction have what are called "dissenters' rights." They have the right to demand payment of the fair value of their shares. However, the exercise of this right is subject to certain procedures and timelines stipulated by law.
Legal Remedies
If a shareholder refuses to give consent and holds enough shares to block the two-thirds requirement, the sale cannot proceed under regular circumstances. However, there are legal remedies that can be sought, such as a derivative suit, to compel the minority shareholder to act in the best interest of the corporation.
Fiduciary Duty
Directors and officers have a fiduciary duty to act in the best interest of the corporation and its shareholders. If the sale of property is deemed essential for corporate growth or survival, legal measures can be taken against a dissenting shareholder who is seen to be acting against the corporation's best interest.
Summary
In summary, the sale of corporate property in the Philippines requires multi-layered approval from both the board of directors and the shareholders. The law provides safeguards to ensure that such a significant transaction is in line with the corporation's objectives and fair to all shareholders. Understanding the legal intricacies surrounding corporate property sale is crucial for both minority and majority shareholders to safeguard their interests and make informed decisions.