July 28, 1994
AMENDED RULES GOVERNING THE DISTRIBUTION OF EXCESS PROFITS OF CORPORATION
In the interest of the investors and of the general public, the Commission pursuant to the powers vested in it by law, hereby promulgates the following rules and regulations:
1. All domestic stock corporations which have surplus profits in excess of necessary requirements for capital expansion and reserves shall declare and distribute the excess profits as dividends to stockholders. prcd
2. The Corporation Code, particularly Sec. 43, provides for the prohibition to retain surplus profits in excess of 100% its paid-in capital except:
a. When justified by definite corporate expansion projects or programs approved by the board of directors; or
b. When the corporation is prohibited under any loan agreement with any financial institution or creditor, whether local or foreign, from declaring dividends without its/his consent and such consent has not yet been secured; or
c. When it can be clearly shown that such retention is necessary under special circumstances obtaining in the corporation such as when there is a need for special reserve for probable contingencies.
3. The Commission...
