a. Subscription Requirements

Subscription and Capital Stock Requirements

Under Section 37 of Republic Act No. 11232, no corporation may increase or decrease its capital stock without the approval of a majority vote of the board of directors and two-thirds of the outstanding capital stock at a stockholders' meeting duly called for that purpose¹. Holders of nonvoting shares are expressly entitled to vote on any such increase or decrease of authorized capital stock². In the event of an increase of capital stock, a certificate signed by a majority of the directors and countersigned by the chairperson and secretary of the stockholders' meeting must be executed, setting forth compliance with statutory requisites, the amount of the increase, and the amount of capital stock or number of no-par shares actually subscribed, together with the names, nationalities, and addresses of the subscribers¹.

Corporations are mandated to keep and preserve at their principal office complete records reflecting their current ownership structure, voting rights, lists of stockholders, and records of all business transactions³. Under Securities Regulation Code Rule 68, issued capital, as a minimum, must be disclosed in the balance sheet⁴. In Abacus Coal Exploration and Development Corporation v. Securities and Exchange Commission, G.R. No. 262484, 22 October 2025, the Supreme Court ruled that disclosures in the notes to financial statements that fail to accurately report acquired assets and issued shares improperly understate corporate assets and equity, thereby constituting sanctionable material deficiencies and misstatements⁴.