Practice question
People give unconditional donations to fund a community archive. They receive no financial return, profit entitlement or promise of gain, and they understand the arrangement solely as a gift. Does payment alone satisfy the Howey profit-expectation element?
- No; the stipulated profit expectation is absent
- Yes; every donation is an investment contract
- Yes; all public-interest projects guarantee investment profit
- No; because a common enterprise can never involve cultural activity
- Yes; the amount paid makes every other element unnecessary
Legal references
- RA8799 Securities Regulation Code: https://lawphil.net/statutes/repacts/ra2000/ra_8799_2000.html Sections3.1,9–10.
- Power Homes Unlimited v. SEC, GR164182, February26 2008 MAIN: https://lawphil.net/judjuris/juri2008/feb2008/gr_164182_2008.html MAIN flexible investment-contract test.
- SEC v. Prosperity.Com, GR164197, January25 2012 MAIN: https://lawphil.net/judjuris/juri2012/jan2012/gr_164197_2012.html MAIN test and role of persuasive foreign authorities.
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