Practice question
Shares were lawfully issued for full required value. Years later their resale price falls. A creditor invokes Section 64 against every director solely because the market price is now below par. No deficient consideration at issuance is alleged. Which conclusion is sound?
- Every market decline proves watered issuance.
- All directors guarantee future market prices.
- The later market decline alone does not establish Section 64's issuance-based grounds.
- The shares automatically cease to exist.
- The creditor automatically owns the corporation.
Legal references
- RA11232, RCC, Sections61–64: https://lawphil.net/statutes/repacts/ra2019/ra_11232_2019.html
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