Practice question
Shares with a total par value of P500,000 are proposed to be issued solely for equipment fairly valued at P300,000. The parties agree to describe it as P500,000, with no additional consideration. Which is correct?
- Their description conclusively cures the shortfall
- Any noncash property may be assigned any value
- The proposal fails the consideration floor; an inflated label cannot replace fair value
- The par value automatically falls to P300,000
- No property may ever be used for shares
Legal references
- https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/2/86463 — RA 11232, section 61
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