THE SIGMA RHO FRATERNITY BAR OPERATIONS 2018 Last Minute Tips ~ Mercantile Lane MERCANTILE LAW 1. Corporate term GR: The period stated in the AOL, provided does not exceed 50 years. EXCEPTION: Unless sooner dissolved or unless said period is extended. (Corp Code, S11) Note: Extension may be for periods not exceeding 50 years in any single instance by an amendment in the AOL, However, extension must be made within 5 years before the expiry date of corporste term, unless there are valid reasons for an eatler extension as determined by law. (Corp Code, S11) 2. Dissolution of a corporation and its effects Dissolution is the extinguishment of the franchise of the corporation and the termination of its corporate existence. Effects of the dissolution of a corporation 1. Corporation ceases asa body corporate to continue the business for which it was established (CC, Sec. 122) 2. "The assets of a corporation will then be liquidated and legal title to the remaining corporate properties are transferred to the stockholders who become co-owners thereof 3, ‘The Corporation continues asa body corporate for 3 years only forthe purpose of winding up oF liquidation 4, Avdissolved corporation cannot be revived, However, those interested may reincomporare by fefllinga refling a new AOL and by-laws (Rebulido ws. CA, GR No 61123, February 28, 1989) 3. Stock vs. Non-stock corporations ee ‘Shares that have been cat! by purchase, donation and redempt ‘STOCK ‘NON-STOCK Have capital stock divided into shares No part of income is distabutable as dividends to its members or trustees Fre authorized to distribute to the holders of such shares dividends or allotments of surplus profits on the ‘Any profit may obtain as an incident to its operations shall, when necessary or proper, be used for the furtherance basis of the shares held of the purpose or purposes ‘Composed of stockholders ‘Composed of members Tis for profit Flas a purpose as per Sec. 88 that is not for profit 4, Treasury shares tier issued as fully paid and have thereafter been acquired by the corporation tion or through some legal means. (Corp Code, 59) Page 1 of 9THE SIGMA RHO FRATERNITY BAR OPERATIONS 2018 Vast Minute Vips — Mercantile Laan NOY Freasury shares are 4 ty shares are not retired shares. They do not revert to the unissued shares of the corporation but are regarded as property acquired by the corporation which may be reissued or resold stapnice fied by the BoD. (HEC Role edanoean/ Troy Sle) 5. Collisi Collision isthe impact of rwo moving veses It isan impact or sudden contact of a vessel with another whether both are in motion or one stationary (Aquino and Hernando, 2016) Rules governing liabilities of parties in case of collision 1. One vessel at fault ~The ship owner of such vessel shall be liable for all resulting damages. 2. Both vessels at fault — Each vessel shall suffer their respective losses but as regards the owners of the cargoes, both vessels shall be jointly and severally iable (1991, 1995, 1998 Bar} Vessel at fault not known — Each vessel shall suffer its own losses and both shall be solidarily liable for loses or damages on the cargo. (Doctrine of Insrutable Faull 6. Averages 3. Averages are all extraordinary of accidental expenses which may be incurred during the voyage for the preservation of the vessel or cargo or both. General Average Personal Average Damages or expenses deliberately caused in | Damages or expenses caused to the vessel or ouder vo save the vessel, its cargo, or both _| cargo that did not inure to the common benefit from real and known risk and borne by respective owners Both the ship and cargo are subject to the ‘No common danger to both the vessel and the same danger cargo “There is a deliberate sacrifice of part of the Expenses and damages are not deliberately made vessel, cargo, or both a ‘Damage or expenses incurred to the vessel, pees Tein redounded to the benefit | Did not inure to common benefit and profit of all of the respective owners persons interested in the vessel and her cargo “Al those who have benefited shal satisfy the | Only the owner of the goods benefiting from the cae damage shall bear the expense of average 7. Exemptsccurities 1. Any secuiy issued or guaranteed by che Government of the Philippines, or by any politcal a secon or agency thereof, or by any person controled or supervised by, and acting as an instrumentality of said government. Page 2 of 910. THE SIGMA RHO FRATERNITY BAR OPERATIONS 2018 Last Minute Tips ~ Mercantile Law Any security issued or guaranteed by the government of any Country with which the Philippines Tuinains diplomatic relations, or by any state, province or political subdivision thereof on the basis of reciprocity. Provided, thatthe SEC may require compliance with the form and content of disclosures the Commission may prescribe Centificates issued by a Receiver or adjudicatory body. Any Security or its devivatives the sale or transfer of which, by law, is under the supervision and regulation of the Office of insurance Commission, Housing and Land Use Regulatory Board, or the Bureau of Internal Revenue. Any security issued by a Bank except is own shares of stock (which serves to promote the sale of securities issued by heavily regulated banks). (Other securities as determined by the SEC by rule or regulation, after public hearing. (SRG Sec 9) 8. Exempt transactions Any Judicial sale or sale by an exeeutor, administrator, guardian, receiver or trustee in insolvency or bankruptcy; ‘Those sold by a pledge holder, mortgagee, or any other similar lien holder, to liquidate a bona fide debt a security pledged in good faith as security for such Debt; ‘Those sold ot offered for sale in an Isolated transaction for the owne?’s account and the owner not being an underwriter; Distribution by the corporation of Securities to its stock holders or other security holders as stock dividends or distribution out of surplus; Sale of Capital stock of a corporation to its own stockholders exclusively wherein no commission oF remuneration is paid or given directly or indirectly in connection with the sale of such capical stock; NOTE: Also, this sale must not involve an underwriter or financial advisor Bonds or notes secured by a mortgage upon Real estate or tangible personal property, where the entire mortgage together with all the bondi or notes secured thereby are sold to a single purchaser ata single sale; Issue and delivery of any security in exchange for any other security of the same Issuer pursuant to the right of conversion entitling the holder of the security surrendered in exchange to make such conversion. Broker’s transactions executed upon customers Orders, on any registered Exchange ot other ‘Trading market Share Subscriptions in capital stock prior to incorporation or in pursuance of an increase in its authorized capital stock under the Corporation Code when no expense is incurred, of no commission, compensation or remuneration is paid or given in connection with the sale oc disposition of such securities, and only when the purpose for soliciting, giving or taking of such subscriptions is to comply with the requirements of such law as to the percentage of the capital stock of a corporation which should be subscribed before it can be registered and duly incorporated, or its authorized capital increased; Exchange of securities by the issuer with its existing security holders exclusively, when no commission ot other remuneration is paid or given directly or indirectly for soliciting such exchange; by a trustee in bankruprey duly approved by the proper Page 3 of 9