Practice question
An enterprise issues certificates representing participation in a profit-sharing agreement. Its officer argues that the certificates cannot be securities because they confer no voting shares. Which answer follows Section3.1(b)?
- Profit-sharing participation certificates are expressly listed; voting-stock status is not required for that class
- Only voting shares can ever be securities
- Lack of voting rights automatically excludes every debt or participation instrument
- The class exists only after a stock exchange listing
- The issuer can remove the class by private declaration
Legal references
- RA8799 Securities Regulation Code: https://lawphil.net/statutes/repacts/ra2000/ra_8799_2000.html Section3.1(a),(b),(e),(g).
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