c. Pre-incorporation Subscription Agreements

Corporate Formation, Capitalization, and Reporting of Subscribed Shares

In the process of forming a corporation, the incorporators certify in the articles of incorporation that they have voluntarily agreed to form a stock or nonstock corporation under the laws of the Philippines¹. Under Section 13 of Republic Act No. 11232, the articles of incorporation filed with the Securities and Exchange Commission must substantially state the name, specific purposes, principal office, term of existence, and the names, nationalities, and residence addresses of the incorporators and interim directors, as well as the capitalization details if it is a stock corporation².

With respect to share issuance and corporate equity, issued capital, as a minimum, must be disclosed in the balance sheet under Securities Regulation Code Rule 68 (Abacus Coal Exploration and Development Corporation v. Securities and Exchange Commission, G.R. No. 262484, 22 October 2025)³. Disclosures in the notes to financial statements that fail to accurately report acquired assets and issued shares improperly understate corporate assets and equity, constituting sanctionable material deficiencies and misstatements (Abacus Coal Exploration and Development Corporation)³. Where capital stock is subsequently increased, the corporation must similarly record and certify the amount of capital stock or number of shares actually subscribed, together with the names, nationalities, and addresses of the subscribing persons⁴.