QuestionsQuestions (Act No. 2772)
Any corporation organized (or to be organized) under Philippine laws may merge or consolidate with another corporation organized (or to be organized) under US laws or the laws of a US State or Territory, or Philippine laws, provided the other corporation owns and operates railway lines within the Philippine Islands. The resulting corporation becomes a domestic corporation of the Philippines upon payment of a proper charter fee.
No merger or consolidation may take place between any railroad corporation, or between any railroad corporations and other land or water carriers, whereby competing agencies of transportation are reduced to one control.
They must enter into a joint agreement under the corporate seals of their respective corporations, prescribing the merger/consolidation terms and conditions, the mode of implementation, the name of the new corporation, and the list of directors and principal officers (with their residences), among other details.
Examples: (1) terms and conditions of the merger/consolidation; (2) the mode of carrying it into effect; (3) the name of the new corporation; (4) number, names, and residences of directors and principal officers; (5) aggregate principal amount and rate of interest of bonds (if any); (6) number of shares and par value; (7) how capital stock of each corporation will be converted; and (8) how and when successor directors/officers will be chosen or appointed if a new corporation is created.
At each corporation’s stockholders’ meeting, each share entitles the holder to one vote. If a majority of all votes cast at each meeting is in favor of the agreement, consolidation, and merger, the approval is obtained for that corporation.
Due notice must be given by publication at least six times a week for two successive weeks in a newspaper published in or near the place of the corporation’s principal office, and by mailing a copy of the notice at least ten days prior to the meeting to the last known post-office address of each stockholder of record.
The president or one of the vice-presidents certifies the approval under the corporate seal, attested by the secretary. Certificates (duly acknowledged) and a copy of the agreement must be presented to the Public Utility Commission for verification of compliance with the Act.
It ascertains and declares whether the applicants have complied with the requirements of Act No. 2772. It then issues or refuses a certificate accordingly.
It becomes complete after the Public Utility Commission certifies the agreement and its order to the chief of the division of archives, etc., and it is filed as prescribed by existing law for filing original articles of incorporation.
A dissenting stockholder who does not give assent and is dissatisfied may signify dissent by written notice served on the president, secretary, or treasurer of the new corporation within three months after the meeting of his corporation to act on the agreement.
It is the fair cash value of the stock as of the day before the vote. If not agreed upon, it is appraised by three disinterested persons resident in the Philippines appointed by the judge of the Court of First Instance of the province where the corporation’s principal office is located.
They transfer to and vest in the new corporation by operation of law. Property (real and personal), rights, franchises, and privileges transfer without further act or deed; debts and liabilities attach to the new corporation and are enforceable as if incurred by it.
No. The title to real estate vested in either corporation by deed or otherwise is not deemed impaired by reason of the Act.
They are preserved unimpaired. Liens upon the property and creditor rights of the merging/consolidating corporations remain protected.
It must establish a principal office in the Philippines as soon as convenient, publish public notice thereof in a newspaper published in Manila, and file a memorandum thereof with the division of archives, patents, copyrights, trademarks, and corporations of the Bureau of Commerce and Industry.
Actions pending by or against either corporation may be prosecuted to judgment as if consolidation had not taken place, or the new corporation may be substituted in its place.
The new corporation has the powers of corporations of the same class under the Corporation Law. It may issue bonds and other evidences of debt and secure payment by mortgage or deed of trust on its business, property, franchises, or any part thereof, and may issue stock in the same manner as other corporations.