In the Philippines, individuals are now allowed to establish a corporation with only one stockholder onboard. The previous corporation code required at least five incorporators and a board of directors, thus becoming a huge obstacle for many due to the difficulty of finding quality and like-minded incorporators. To circumvent this obstacle, entrepreneurs had to register their business as a sole proprietorship.
The Revised Corporation Code (RCC) or Republic Act 11232 is a welcome change since the majority of the businesses here in the Philippines are composed of small, and medium-sized enterprises. The revision of the old code is the one that allows for the creation of one-person corporations (OPC), as well as the parameters of its benefits.
If you’re planning on starting a one-person corporation, here’s everything you need to know:
The sole stockholder must be a natural person (of legal age), trust, or estate. Foreign individuals are also welcome to put up a one-person corporation. This may depend though on the appropriate capital requirement and regulations on foreign ownership.
According to the guidelines released by the Securities and Exchange Commission (SEC), certain corporations such as banks, quasi-banks, trust, insurance, and publicly-listed companies are not allowed to register themselves as a one-person corporation. Licensed professionals are also prohibited from forming a one-person corporation that’s centered on that particular profession.
Being the sole stockholder, they take on the role of director and president of their corporation.
Once the Certificate of Incorporation is released, OPCs only have 15 days to appoint its treasurer, corporate secretary, and other officers. The treasurer must be a resident of the Philippines while the corporate secretary must be a Filipino citizen.
Sole stockholders may also double as the treasurer of the corporation. However, they must submit a surety bond based on their corporation’s authorized capital stock. This bond is subject to renewal every two years.
In order to differentiate one-person corporations from other companies, the letters “OPC” must be attached below or at the end of the corporation’s name. Any suffix that shows the business as an ordinary stock corporation must be removed.
Before registering, verify your corporation’s proposed business name and check for its availability at the SEC’s office at the Philippine International Convention Center (PICC). Should the business name be taken, you may file for an appeal.
Submit your OPC’s Articles of Incorporation to the SEC Company Registration and Monitoring Department. These Articles of Incorporation include:
Applicants are also required to provide a nominee and alternate nominee who can take on the role of incorporator in case of death or incapacity.
Start your one-person corporation with the help of FilePino, the number one team to call for expats, foreign companies, and startups who want to start a business in the Philippines. Contact us today at +1.806.553.6552 (USA) or +63.917.8922337 (Philippines).