Practice question
Three qualifying property transferors collectively own 60% of voting power after a stock exchange satisfying all other Section 40(C)(2) conditions. Each individually owns less than 51%. Does that fact alone defeat control?
- Yes, every transferor must individually own 51%
- Yes, collective ownership is prohibited
- Yes, three transferors can never qualify
- No; the amended rule expressly uses collective ownership of the transferors
- Only the corporation’s bookkeeper decides
Legal references
- RA 11534, Section 10, amended NIRC Section 40(C)(2) and (6): https://lawphil.net/statutes/repacts/ra2021/ra_11534_2021.html
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