Cold Realty Corp., a closely-held corporation, has an authorized capital stock of 100,000 shares with par value of P1.00/share. Of the 100,000,000 authorized shares, 25,000,000 thereof is subscribed and fully paid up by the following stockholders:
Mr. Malamig 5,000,000
Mrs. Maginaw 5,000,000
Mr. Tugnaw 5,000,000
Mr. Cool 5,000,000
Mr. Fresh 5,000,000
Total Shares Outstanding 25,000,000
On March 2018, Cold Realty Corp., finally decides to conduct an IPO and initially offers
25,000,000 of its unissued shares to the investing public for P1.50/share.
At the IPO, one of its existing stockholders, Mrs. Maginaw, has likewise decided to sell her entire 5,000,000 shares to the public for P1.50/share.
1. How much is the percentage tax due on the primary offering?
2. How much is the percentage tax due on the secondary offering?
3. If in June 2018, Cold Realty Corp. again decides to increase capitalization by offering
another 30,000,000 of unissued shares to the public at P2.00/share, how much is the
percentage tax due?
4. If in July 2018, Mr. Malamig decides to sell his entire stock ownership to the public at
P2.00/share, how much is the percentage tax due?
1. 375K
25M+25M = 50M
25M/50M = 50%>33 1/3%
25M*1.5 = 37.5M*1% = P375K
2. 300K
5M/50M = 10%
5M*1.5 = 7.5M*4% = P300K
3. 600K
30M+50M = 80M
30M/80M = 37.5%
30M*2 = 60M*1% = P600K
4. 400K
5M/80M = 6.25%
5M*2 = 10M*4% = P400K
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