Question & AnswerQ&A (Act No. 2772)
The main purpose of Act No. 2772 is to authorize the merger or consolidation of certain corporations, particularly those owning and operating railway lines within the Philippine Islands, and to regulate the process and conditions under which such mergers or consolidations may occur.
Any corporation organized, or to be organized, under any law of the Philippine Islands may merge or consolidate with any corporation organized under laws of the United States, any State or Territory of the United States, or the Philippine Islands that owns and operates railway lines within the Philippine Islands.
No merger or consolidation shall take place between any railroad corporation or between any railroad corporations and other carriers by land or water if it results in reducing competing transportation agencies to one control.
They must enter into a joint agreement under their corporate seals detailing the terms, conditions, mode of effecting the merger or consolidation, names, and composition of the new board, capital stock details, and other necessary provisions to perfect the merger or consolidation.
It must be submitted to the stockholders at a specially called meeting with due notice published and mailed; a majority of all votes cast by stockholders must approve the agreement for it to be adopted.
Certificates of approval signed by the president or vice-president and attested by the secretary, along with the agreement, are presented to the Public Utility Commission for certification. If approved, the commission issues a certificate that must be filed with the Bureau of Commerce and Industry for the merger or consolidation to be complete.
A stockholder who dissents can, within three months after the meeting, notify the new corporation in writing and receive the fair cash value of their stock as of the day before the vote. If there's disagreement on value, an appraisal by three disinterested persons appointed by the Court of First Instance will be made.
All rights, privileges, franchises, properties, debts, and liabilities of the merging corporations shall be vested in the new corporation without further act or deed, although the original corporations continue to exist for preserving creditor rights and liens.
The new corporation must establish a principal office in the Philippine Islands, give public notice of this office in a Manila newspaper, and file a memorandum with the Bureau of Commerce and Industry.
Suits by or against the original corporations may continue or the new corporation can be substituted in pending actions, and suits may also be brought against the new corporation as with any other corporation under the Corporation Law.
It has all powers and is subject to all restrictions applicable to corporations of the same class under the Corporation Law. It may issue bonds, secure payment through mortgages or deeds of trust, issue stock in connection with the merger, and do all things necessary to carry out the merger agreement.
Yes, all Acts or parts of Acts inconsistent with this Act are repealed.