Did somebody give you 1 share or 1% share in a corporation just because they needed to complete the minimum number of shareholders?
We see this a lot in family corporations and businesses. Stockholders whose names are placed in the corporation as owners, when in fact they don’t have any investment in the corporation…or they’re not even involved in the corporation at all.
Many times we find that the owners of a corporation include the names of the owner’s children. Sometimes you will even see secretaries, drivers, or even household helpers named as part owners of the company.
So our question for today comes from Marie G, and she writes:
“Attorney, my friend started a corporation many years back and he asked me if I can be a dummy stockholder for him along with his girlfriend, his mom, and tita (auntie). I agreed. I think he gave me 1%.
Since then I do not have any update on what happened to the company. Sometimes my friend makes me sign things. But when I ask him about it, he tells me that these are routine documents. I’m worried I might get sued someday. What are my rights as a dummy? ”
If you were wondering about the same thing as Marie, stick around.
This episode is brought to you by the "Putting up a Corporation" workshop, an online course that orients you on the basics of starting a company in the Philippines. It talks about what is a corporation exactly, what are the things you should decide on first, before making the leap, and what is the procedure to expect when processing the papers.
Get your business started right. Go to info.legalguide.ph/corporation to learn more.
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The information contained in this presentation is provided for informational purposes only, and should not be construed as legal advice. We do not guarantee any results, and the information on this presentation may not constitute the most up-to-date legal or other information. you should not act on the basis of any content included without seeking legal or professional advice. Only your attorney can provide assurances that the information contained herein - and your interpretation of it - is applicable or appropriate to your particular situation.
