Practice question
An asset disposition leaves a corporation incapable of continuing its business or accomplishing its incorporation purpose. The parties rely solely on a label calling it a small asset-only deal. No exception applies. What Section39 inquiry is essential?
- The statutory substantial-assets test, including its incapacity criterion, rather than the label alone
- Only the caption controls every legal consequence
- A small-font contract is automatically exempt
- Goodwill can never be an asset
- The buyer may unilaterally waive seller shareholder rights
Legal references
- RA11232 Revised Corporation Code: https://lawphil.net/statutes/repacts/ra2019/ra_11232_2019.html Section39.
- Y-I Leisure v. Yu, GR207161, September8 2015, main opinion: https://lawphil.net/judjuris/juri2015/sep2015/gr_207161_2015.html Asset-disposition context.
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