All ▸ Bar 2024 ▸ COMMERCIAL AND TAXATION LAWS ▸ I. CORPORATION LAW (R.A. No. 11232, Revised Corporation Code) ▸ C. Incorporation and Organization ▸ 3. Capitalization - Section 12

Question

Subject: Incorporation and Organization
Topic: Capitalization - Section 12

A, B, and C decide to incorporate their business as a private corporation named ABC Corporation. They plan to raise capital for their corporation through the issuance of shares of stock. To ensure compliance with the law, they consulted a lawyer who provided them with the necessary information and documents. However, there are certain considerations that they need to understand regarding capitalization under Section 12 of the Corporation Code.

Based on Section 12 of the Corporation Code, answer the following questions:

What is the minimum authorized capital stock required for a corporation to be incorporated?
What is the minimum subscribed capital stock required before a corporation can commence corporate existence?
Is it possible for a corporation to have an amount of paid-up capital that is less than its subscribed capital stock?
Can the incorporators incur personal liability for any unpaid subscription?
What are the consequences if a corporation distributes dividends when it does not have sufficient retained earnings?

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