CHAPTER 7

Equity Management

Reporters:
Jagonos, Niel Mark
Jamisola, Jovelyn
Lacsamana, Alvin
 Reporter 1
Jagonos, Niel Mark T.
Equity Management

Equity Management is the process of creating and

managing owners in your company. (Smith, 2020)

Stock Registration is the process of registering a

company’s stock for sale to the public
Equity Management

Security Exchange Commission is the registrar and

overseer of Philippine Corporate Sector

Corporation Code of the Philippines, the law that

governs the rule and regulations in the establishment
and operations of stock and non-stock corporation in
the Philippines.
Equity Management

Republic Act No. 11232, otherwise known as the

Revised Corporation Code of the Philippines (RCC),
introduced several innovations committed to improve
the ease of doing business in the country.

One-Person Corporation (OPC) is a corporation with a

single stockholder.
Equity Management

Schedule of Availability of Service

Monday to Friday
8:00 am to 5:00 pm without noon break
Equity Management

Basic Requirements
1. Cover Sheets
2. Reservation Payment Confirmation
3. Articles of Incorporation
4. By Laws
5. Treasurer’s Affidavit
6. Joint Undertaking to Change Name
 Reporter 2
Jamisola, Jovelyn A.
Equity Management

Republic Act 8799, otherwise known as the Securities

Regulation Code, was enacted is a landmark legislation
seeking the achievement of free market that is self-
regulating.
Exempt Securities under SEC Code

1. Any securities issued or guaranteed by the

Government of the Philippines.
2. Any securities issued by the government of other
country with witch the Philippine had diplomatic
relations.
3. Certificate issued by a reciever in bankruptcy.
Exempt Securities under SEC Code

4. Any security or its derivatives the sale or transfer

of which, by law, is under the supervision and
regulation of the Office of Insurance Commission
5. Any security issued by a bank except its own shares
of stocks
6. Other securities as determined by SEC
Equity Management

What business activity required minimum paid up

capital?

• Based on Industry
• Based on Equity
Based on Industry
Based on Industry
Based on Equity
Equity Management

What business activity requires clearances from other

SEC departments ?
Equity Management
Equity Management

What business activity requires endorsements from

other government agencies?
Business requiring endorsements
from other government agencies
 Reporter 3
Lacsamana, Alvin
Accounting for Stock Sales

Most type of stock contain a par value, which is a

minimum price below which the stock cannot be sold.
The original intent for using par value was to ensure
that a residual amount of funding was contributed to
the company, and which could not be removed from it
until dissolution of the corporate identity.
Equity Related Controls

There are a number of controls that should be used

during the process of selling equity to the investment
community. The following controls are listed in
sequential order, from the start of an equity offering in
the United States.
Equity Related Controls

Regulation A is an exemption from

registration requirements with the SEC that
applies to public offerings of securities.

Regulation D let’s companies doing specific

types of private placements raise capital
without needing to register the securities
with the SEC
General Stock Sale Controls

1. Verify available authorized shares.

2. Verify board authorization
3. Have due diligence officer review all SEC filings
4. Verify contents of security authorization letter.
Equity Related Controls

Controls Specific to Regulation A Stock Sales

1. Review disqualification provisions.

2. Submit “test the waters” documents to counsel.
3. Verify termination of “test the waters” documents
4. Control release of offering circular..
5. Submit advertising to counsel.
6. Specify an escrow cap..
7. Update offering circular.
8. Ensure that Form 2-A is filed.
Controls Specific to Regulation D Stock Sales

1. Review outgoing subscription agreement.

2. Review received subscription agreement.
3. Review investor qualification certificate.
4. Verify cash receipt.
5. Ensure that Form D is filed.
Equity Related Policies

• Policies Specific to Regulation A Stock Sales

• Policies Specific to Regulation D Stock Sales
Thank you for listening!