Setting Up a Non-stock Non-profit Organization in the Philippines

Non-stock corporations or foundations in the Philippines may be formed for charitable, religious, educational, professional, cultural, fraternal, literary, scientific, social, civic service, or similar purposes, such as trade, industry, agricultural, and like chambers, or any combination thereof. 

Certain accredited non-stock, non-profit corporations in the Philippines are exempt from income tax on donations, grants, and gifts provided they are: 

1. Organized “exclusively” for one or more of the following purposes: religious, charitable, scientific, athletic, social welfare, cultural purposes, or for the rehabilitation of veterans and; 

2. No part of their net income or asset belongs to or inures to the benefit of any member, organizer, officer, or any specific person. 

To set up a non-stock non-profit corporation in the Philippines, you must first be registered with different government agencies. This article might be a help to your generous and big heart, having in mind the welfare of the less fortunate, or just want to start a non-stock non-profit corporation. 

Incorporators 

Incorporators shall be not less than five (5) in number but not more than fifteen (15) and the majority of whom are residents of the Philippines. Resident or non-resident aliens (foreigners) can be incorporators of a non-stock corporation, provided that the majority of the incorporators are residents of the Philippines. 

Basic requirements for registration with the Securities and Exchange Commission (SEC) 

The documentary requirements of the Securities and Exchange Commission (SEC) in the Philippines are as follows: 

1. Name Verification Slip 

2. Articles of Incorporation and By-laws; 

3. Joint affidavit of two incorporators to change the corporate name; 

4. List of members certified by the corporate secretary, unless already stated in the Articles of Incorporation; and 

5. List of the names of contributors or donors and the amounts contributed or donated certified by the treasurer 

There is no fixed amount of contribution required but only such reasonable amount as the incorporators and trustees may deem sufficient to enable the corporation to start operation, except in the case of foundations which must have a minimum contribution of at least One Million Pesos (P1,000,000.00). 

Additional requirements: 

1. Endorsement/clearance from other government agencies, if applicable; 

2. For Foundations: Notarized certificate of bank deposit of the contribution which shall not be less than P1,000,000.00 and statement of willingness to allow the Commission to conduct an audit; 

3. For Religious corporations: Refer to Sections 109-116 of the Code, and an affidavit of affirmation or verification by the chief priest, rabbi, minister, or presiding elder; 

4. For Federations: Certified list of member associations by the corporate secretary or president; 

5. For Condominium corporations/associations: Master Deed with the primary entry of the Register of Deeds and Certification that there is no other existing similar condominium association within the condominium project. 

Once an application was submitted, the SEC evaluator will review the initial drafts for seven (7) working days and will email that the application is preapproved. After signing and uploading the generated forms, SEC will send another email if the application was approved and qualified for payment and you will receive a payment assessment form that should be paid within 45 days. Once paid, the digital COI will be received, and the original documents together with proof of payment will be submitted to the SEC office within 60 days from the date of incorporation in order to claim the original Certificate of Incorporation. 

Registration with the BIR 

The non-stock non-profit corporation must be registered with the BIR within 30 days from the date of Incorporation and obtain a Tax Identification Number (TIN), registration of book of accounts, and official receipts or invoices. Certain registration fees and taxes will be paid.  

If you wish to be tax-exempt, non-stock non-profit corporations in the Philippines are required to secure a BIR Tax Exemption Ruling.  

Business Permits and Licenses 

Non-stock non-profit corporations must also be registered in the Local Government unit (LGU) where the principal office address of the company is located and secure the business permit, barangay clearance, sanitary permit, fire safety inspection certificate, and other clearances in order to go operational. Certain registration fees will be paid. 

Employer Registration 

Employers for non-stock non-profits are required to be registered with Social Security System, Philippine Health Insurance Corporation, and Home Development Mutual Fund for the benefit of their employees.