Lex Rex Ph

Treasury Shares

Treasury shares are those previously issued by the company and fully paid by subscribers but are subsequently reacquired by the issuing corporation through PDFRL (purchase, donation, forfeiture, redemption, or lawful means)

Nature of treasury shares

  • they are not original shares or subscription shares
  • not an asset because a corporation may not be counted as a shareholder of its own shares
  • It’s a deduction from the total shareholders’ equity (it’s a shared stock but no longer in the hands of the shareholder)

Resale of treasury shares only allowed if:

  1. at reasonable price
  2. price is fixed by the BoD

Treasury shares not be entitled to:

  1. Dividends
  2. Voting rights

Treasury shares shall not be distributable as:

  1. Cash or
  2. Stock dividend

Status of treasury shares

Q: Is there a watering of stock if treasury shares are sold below par value? 

No, because watering of stock only contemplates the original issuance of shares.

Other Content You May Be Interested In:

Ninal v Bayadog Digest

Cohabitation as an exception to marriage license must be without legal impediments. The validity of a void marriage may be questioned even after the death of either of the parties. 328 SCRA

Read More »

Res Judicata

is a rule that a final judgment on the merits by a court of competent jurisdiction is conclusive of the rights of the parties or their privies in all subsequent suits on

Read More »

Bautista vs. Salonga Digest

G.R. No. 86439, 13 April 1989 Facts In August 1987, President Cory, through a letter, designated Mary Bautista first as “Acting Chairman of CHR” then as permanent. She then took oath before

Read More »

Bad Faith

It is factual and evidentiary. It does not mean bad judgment or negligence because it imports a dishonest purpose or some moral obliquity and conscious wrongdoing. It means breach of a known

Read More »

ABS-CBN vs. Hilario

July 10, 2019 Facts Mr. Edmund Ty incorporated CCI to engage in the business of making props for TV programs et al. Honorato and Banting were hired as employees. In June 2003,

Read More »
en_USEnglish