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Promissory Note For Shares for Philippines

Promissory Note For Shares Template for Philippines

A Promissory Note for Shares is a legally binding financial instrument used in the Philippines that documents a promise to pay for shares in a corporation. The document, governed by Philippine law including the Securities Regulation Code and Revised Corporation Code, establishes the terms and conditions for payment of shares, including payment schedule, interest rates, and security arrangements. It serves as both a debt instrument and a corporate document, requiring compliance with SEC regulations and corporate governance requirements while providing legal protection for both the share issuer and the share purchaser.

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What is a Promissory Note For Shares?

The Promissory Note For Shares is a specialized financial instrument commonly used in Philippine corporate transactions when immediate payment for shares is not feasible or desired. This document type bridges the gap between share subscription and payment, providing a legally enforceable commitment to pay while allowing flexible payment terms. It's particularly relevant in situations involving share capital increases, employee share ownership schemes, or corporate restructuring. The document must comply with Philippine Securities and Exchange Commission regulations, the Revised Corporation Code, and other relevant financial regulations. It typically includes specific details about the shares being purchased, payment terms, interest rates, security arrangements, and default provisions. The note's format and content are influenced by both local corporate practice and international standards, making it a crucial tool in Philippine corporate finance.

What sections should be included in a Promissory Note For Shares?

1. Parties: Identification of the Maker (promisor) and the Payee (promisee/company issuing shares), including complete legal names and addresses

2. Background: Brief context of the share subscription or purchase agreement that this promissory note relates to

3. Definitions: Key terms used in the document including 'Shares', 'Principal Sum', 'Interest Rate', and other relevant terms

4. Promise to Pay: Clear statement of the unconditional promise to pay, specifying the principal amount and payment terms

5. Share Details: Specification of number, class, and par value of shares being purchased

6. Payment Terms: Details of payment schedule, interest rate, computation method, and payment mechanics

7. Default Provisions: Consequences of default, including acceleration clauses and remedies

8. Security: Details of any collateral or security provided for the promise to pay

9. Governing Law: Specification of Philippine law as governing law and jurisdiction for disputes

What sections are optional to include in a Promissory Note For Shares?

1. Representations and Warranties: Used when additional assurances are needed regarding the maker's capacity and authority to enter into the obligation

2. Transfer Restrictions: Include when there are specific limitations on transferring either the note or the underlying shares

3. Tax Provisions: Required when specific tax arrangements or responsibilities need to be clarified

4. Corporate Approvals: Include when the note requires specific corporate authorizations or board approvals

5. Prepayment Terms: Optional section specifying whether early payment is allowed and under what terms

6. Share Retention Requirements: Include when there are specific requirements about holding periods for the shares

What schedules should be included in a Promissory Note For Shares?

1. Payment Schedule: Detailed breakdown of payment installments, dates, and amounts

2. Share Certificate Details: Specifics of the share certificates including certificate numbers and share classifications

3. Security Details: If applicable, detailed description of any collateral or security arrangements

4. Corporate Authorizations: Copies of relevant board resolutions or corporate approvals

5. Share Valuation: If applicable, documentation supporting the agreed share value

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Philippines

Publisher

Ƶ

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant legal definitions



























Clauses


























Relevant Industries

Financial Services

Banking

Corporate Services

Legal Services

Investment Management

Private Equity

Venture Capital

Manufacturing

Technology

Real Estate

Retail

Healthcare

Energy

Telecommunications

Relevant Teams

Legal

Finance

Corporate Secretariat

Treasury

Compliance

Corporate Governance

Investment

Risk Management

Corporate Development

Mergers & Acquisitions

Relevant Roles

Chief Financial Officer

Corporate Secretary

Legal Counsel

Investment Manager

Corporate Finance Manager

Compliance Officer

Financial Controller

Treasury Manager

Company Director

Corporate Governance Officer

Investment Banker

Private Equity Manager

Venture Capital Manager

Share Transfer Agent

Corporate Finance Analyst

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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