January 31, 2019
SEC-OGC OPINION NO. 01-19
RE: ASSIGNMENT OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF A CORPORATION
Joselito P. Galicia
Director, Wisecable
Purok Galingan, Mankilam, Tagum City
Gentlemen :
This is in response to your letter dated 1 December 2018 requesting an opinion regarding a proposed assignment by a corporation ("Corporation A") of the assets of one of its branches to another entity.
You stated in your letter that Corporation A is a domestic corporation registered with this Commission whose primary purpose is to provide cable TV services. Corporation A maintains five (5) branches in different areas of the Philippines. It intends to assign all assets of one of its branches (Davao del Norte) to a single proprietorship. The assets of the five branches are more or less about the same size, subscriber base and cable set up.
Thus, you are requesting for an opinion on whether the proposed assignment is considered a sale of all or substantially all of the assets of Corporation A that would require stockholders' approval.
Section 40 of the Corporation Code ("Code") provides:
"Section 40.wxwxSale or other...
