Practice question
A board approves issuance of shares below par and invokes business judgment solely because the financing is commercially attractive. The statutory prohibition applies and no exception exists. Which is correct?
- Commercial attraction always cures the price defect
- All share prices are unregulated
- Business judgment does not displace Section 61’s statutory price floor.
- A unanimous board can repeal the floor
- Only a later loss makes the prohibition applicable
Legal references
- Revised Corporation Code, RA 11232, Sections 22, 30 and 61: https://lawphil.net/statutes/repacts/ra2019/ra_11232_2019.html
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