A stock certificate is a written document that certifies a person's ownership of shares in a corporation. It is signed by corporate officers and includes the shareholder's name, number and type of shares, and date of issue. While not legally required, a stock certificate provides tangible evidence of stock ownership. To issue certificates, a corporate secretary obtains records, registers them with the SEC, fills out certificates with shareholder details, gets signatures, affixes the corporate seal, and delivers them to shareholders who have fully paid for their shares. The tax code also requires corporations to pay documentary stamp tax on the original issue of shares, which is due based on share par value and counted from the date of SEC incorporation approval rather than physical
A stock certificate is a written document that certifies a person's ownership of shares in a corporation. It is signed by corporate officers and includes the shareholder's name, number and type of shares, and date of issue. While not legally required, a stock certificate provides tangible evidence of stock ownership. To issue certificates, a corporate secretary obtains records, registers them with the SEC, fills out certificates with shareholder details, gets signatures, affixes the corporate seal, and delivers them to shareholders who have fully paid for their shares. The tax code also requires corporations to pay documentary stamp tax on the original issue of shares, which is due based on share par value and counted from the date of SEC incorporation approval rather than physical
A stock certificate is a written document that certifies a person's ownership of shares in a corporation. It is signed by corporate officers and includes the shareholder's name, number and type of shares, and date of issue. While not legally required, a stock certificate provides tangible evidence of stock ownership. To issue certificates, a corporate secretary obtains records, registers them with the SEC, fills out certificates with shareholder details, gets signatures, affixes the corporate seal, and delivers them to shareholders who have fully paid for their shares. The tax code also requires corporations to pay documentary stamp tax on the original issue of shares, which is due based on share par value and counted from the date of SEC incorporation approval rather than physical
Posted on May 7, 2010 by Hector M. de Leon Jr Posted in Commercial Law
Tagged corporation, stamp tax, stockholders A stock certificate is a written instrument signed by the proper officers of the corporation certifying that the person named therein is the registered owned of a designated number of shares of stock in the corporation. It indicates the name of the registered holder, the number, kind and class of shares represented and the date of the issuance. (see Corporation Code Annotated, P. 542 [2006]). A stock certificate is not necessary to render a person a stockholder in a corporation. However, a stock certificate is tangible evidence of the stock itself (see Corporation Code Annotated, P. 543 [2006]). After the corporation is formed, the Corporate Secretary (or the Assistant Corporate Secretary) may issue the stock certificates to the stockholders who fully paid their subscription. For this purpose, the Corporate Secretary will take the following steps: (a) obtain a stock and transfer book; (b) register the stock and transfer book with the Securities and Exchange Commission (SEC); (c) obtain blank stock certificates (which the Corporate Secretary can obtain from bookstores or from printers); (d) fill-up the relevant information in the stock and transfer book and in the stock certificate; (e) sign the stock certificate as Corporate Secretary; (f) forward the stock certificate to the President (or the Vice- President) of the corporation for signature; (g) seal the stock certificate with the corporate seal; and (h) deliver the stock certificate to the stockholder. The by-laws of the corporation may provide other requirements for the issuance of stock certificates. The Corporate Secretary may issue the stock certificate only if the stockholder has paid the full amount of subscription (Corporation Code, sec. 64) In other words, no stock certificate can be issued if the subscription price is not yet fully paid. Holders of subscribed shares not fully paid have all the rights of a stockholder (even if they dont hold stock certificates), provided that the shares are not delinquent (see Corporation Code, sec. 72). Shares are considered delinquent if the stockholder failed to pay any unpaid subscription within 30 days from the due date thereof (Corporation Code, sec. 67). The Tax Code subjects the original issuance of shares by a Philippine corporation to documentary stamp tax (DST), which must be paid by either the corporation or the stockholder. If the shares have par value, the DST payable is PhP1 for every PhP200 of par value. Thus, if 1,000,000 shares with a par value of PhP1 each are issued, DST of PhP5,000 is payable. If the DST is not paid on time, the BIR will impose a surcharge of 25% (plus interest). In this regard, the date of payment of DST on the issuance of shares is counted from the date the SEC approves the incorporation of the corporation, and not from the date the stock certificates are actually issued. For example, if the SEC approved the incorporation of the corporation on May 7, DST on the issuance of the shares must be paid not later than June 5 (in accordance with the rule that DST should be paid not later than the 5th day of the next month after the date of the transaction). If the stockholder subscribes to shares after incorporation, then the date of the subscription will be deemed to be the date of the transaction (and DST paid not later than the due date thereof). Note that DST is due on the issuance of shares (which should not be confused with the issuance of stock certificates), whether or not the subscription price on the shares was fully paid. Under RMC Circular 8-98 (as amended), citing Commissioner of Internal Revenue vs. Construction Resources of Asia, Inc., the DST on original issuance of shares attaches upon acceptance of the stockholders subscription in the capital stock of a corporation regardless of the physical issuance and delivery to the stockholder of the certificate of stock evidencing his stockholding. According to the BIR, what is being taxed is the privilege of issuing shares of stock, and, therefore, the taxes accrue at the time the shares are issued. . . issuance means the point at which the stockholder acquires and may exercise attributes of ownership over the stocks. . . As stated previously, holders of subscribed shared not fully paid generally have all the rights of a stockholder. (Note: This is part of a series of How To articles. These articles intend to give the reader a general overview of the legal aspects of doing certain things and they will not contain all details regarding the proposed action. There may be changes to applicable laws and regulations after the article is posted. You should consult your lawyer if you wish to take a particular action. See Disclaimer page for additional disclaimers.)