Practice question
A corporation validly creates preferred shares with a stated dividend preference in its articles and stock certificates, complying with applicable law. A common shareholder argues that section 6 makes every preference invalid. Is that correct?
- No; the Code allows lawful classifications and preferences alongside its default equality rule.
- Yes; classes of shares are categorically prohibited.
- Yes; the articles can never specify different rights.
- No; because any preference, even unlawful or undisclosed, is automatically valid.
- Yes; stock certificates replace every statute.
Legal references
- Revised Corporation Code, RA 11232, sections 3 and 6, https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/2/86463
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