By: Marie Joy B. Crebillo
Among the efforts of Philippine government to attract more investors to invest in the Philippines is the passage of the Revised Corporation Code (Republic Act No. 11232) to ease the process of doing business in Philippines. One of the highlights of the Revised Corporation Code of the Philippines was creation of a legal entity in Philippines, corporation with a single stockholder or also known as the One Person Corporation (OPC) provided under Title III, Chapter III of the Revised Corporation Code Philippines and implemented by SEC Memorandum Circular No. 7 series of 2019. To learn more about the OPC in Philippines, you may read our other article on Features of OPC in Philippines.
When OPC registration started, our team has already processed and secured an approval for one of our clients under manual processing. Good thing now because SEC has already provided for an online platform for OPC registration in Philippines along with that of regular corporation with less than five incorporations. In this post, let us share you matters related to how to register a One Person Corporation in Philippines.
I. Basic information needed for OPC registration
To facilitate your registration of OPC in Philippines, I would suggest you prepare ahead the following:
II. Documentary requirements for OPC Registration
Based on the above information needed for OPC registration in Philippines, you are now ready to prepare the documentary requirements for OPC registration in Philippines. Notably, SEC has provided pro-forma documentary requirements for OPC registration in Philippines as follows that you can browse ahead for familiarity:
Bylaws required for regular corporations are no longer required for OPC registration in Philippines. Those are just samples and you can make some necessary revisions on some other aspects but see to it that you do not go beyond allowed wordings. Seek assistance of preferred consultant, if needed, to ensure that your revisions are in order and acceptable with SEC.
Having familiarized those documentary requirements for OPC registration, you can now proceed to fill-out the SEC online platform for OPC registration in Philippines. It may take a while and may require some patience at times. Once done, you can print those forms and execute by affixing signatures on printed ones along with notarization if signed in Philippines or if signed abroad, consularization with nearest Philippine Embassy/ Consular Office or alternatively, have it apostilled.
III. Bank account for OPC Registration
Based on the executed documents, the duly appointed treasurer for OPC registration may prefer to open a treasurer-in-trust for OPC (TITF) account with a preferred bank for the paid-up capitalization. This may be dispensed with for local registrants and they may prefer to open a regular bank account after approval of OPC registration in Philippines. However, this could be mandated for foreign investors registering OPC in Philippines to show proof of compliance with minimum paid-up capitalization. Wire transfer or inward remittance of foreign direct investment or paid-up capitalization could be made thereafter and once credited to the TITF account, securing Certificates (Bank Deposit and Inward Remittances – for SEC and for BSP) from the bank follows. This could be required to be uploaded to the online platform for OPC registration in Philippines as part of the documents for OPC registration.
Upon SEC approval of OPC registration in Philippines, you can now proceed with the regularization of the account into a preferred bank account for operational purposes – checking account or savings account under peso or foreign currency, and later you can have an online banking.
IV. SEC Evaluation and approval of OPC Registration
From your online OPC application, it may take a while for SEC to evaluate your application for OPC registration in Philippines. Comments will be sent via mail that would require further compliance such as uploading of documentary requirements for OPC registration or clarification. Upon finding that the online application for OPC is in order, it will issue a Payment Assessment Form that you need to pay in SEC allowed payment platforms and uploading proof of payment. Shortly thereafter, SEC will notify you of its approval and securing the original copy of duly approved online application for OPC registration in Philippines. SEC approval of OPC registration in Philippines marks the legal entity of the OPC that you can use for preliminary corporate transactions like hiring employees, entering lease contracts, and other corporate acts.
V. Business Permit of OPC Philippines
SEC approved Certificate of Incorporation of OPC in Philippines would then be used for registration of OPC with business permit with the local government (city or municipality) of location. Without a business permit, your operation will be tagged as illegal in Philippines so this is a must. Forms and requirements for securing business permit of OPC in Philippines would vary for each local government along with license and other fees so I suggest you closely deal with the local government of location. At end process, you should secure an occupancy permit and a business permit for your OPC in Philippines.
VI. Tax Authority & Employee Welfare Registrations of OPC Philippines
With the business permit of your OPC in Philippines, you may now proceed to the tax authority (Bureau of Internal Revenue) for the tax identification number (TIN), books of accounts, and invoicing. You will need to fill out BIR forms registrations, pay registration fee and documentary stamp tax on OPC capitalization along with the lease contract, if any, and for printing of documents for invoicing.
Simultaneously, you may proceed with further with employee welfare registrations of your OPC in Philippines – Social Security System (SSS), Philippine Health Insurance System (PHIC), and Home Development Mutual Fund (HDMF). To register, you need to have at least one (1) employee number for SSS, PHIC, HDMF that you need to indicate in those forms.
VII. Other Government Agency Registrations of OPC Philippines
The above constitutes the basic government agencies for OPC registration in Philippines but at times, other agencies could be involved depending on intended operations of your OPC in Philippines and you may have to register further such as Import/Export license with Bureau of Customs (BOC) for trading or wholesaling of imported goods, product registration with Food and Drugs Administration (FDA), and securing secondary license for some businesses like lending companies. For your foreign investment in paid-up capitalization of OPC in Philippines, you may opt to undergo registration of foreign direct (FDI) with Bangko Sentral ng Pilipinas (BSP) for future reference in sourcing foreign currencies from banks for repatriation of capital and profits from your OPC in the Philippines.
VIII. OPC Registration timelines and related costs/ expenses to register in Philippines
Timelines and costs, I would say, are variables. At times government agencies would have processing timelines that you could refer but as issues arise, they adjust accordingly. Costs at time could depend on the amount of capitalization of your OPC in Philippines as SEC and other fees are based on capitalization for initial registration. At any rate, we could estimate a processing timeline 30 to 40 working days to process your OPC registration in Philippines and basic registration costs and expenses for government fees, taxes, and related expenses of US$500.00 to US$1,000.00 for OPC with capitalization of not more than US$20,000.00 (PhP1M equivalent, more or less). If you would prefer professional assistance, professional fees for OPC registration in Philippines would likewise vary among professional firms and entities engaged in business set-up in Philippines.
Summary
The above provides the basics of OPC registration in the Philippines that could serve as a guide in developing basic understanding that could prove useful in dealing with OPC registration in the Philippines.
About the author:
Marie Joy B. Crebillo is a member of the para-legal team of Tax and Accounting Center, Inc. dealing with company set-up in the Philippines for local and foreign clientele and registrations with other government agencies (SEC, BIR, PEZA, etc) along with corporate works related to corporate secretarial and resident agent functions. She is also the Team Lead of the Government Processing Team at G. Pagaspaspas Partner’s & Co. CPAs (a full service arm accounting firm based in Makati City, Metro Manila, Philippines).
Disclaimer: This is for purposes of academic discussions only as personally summarized by the author, not of Tax and Accounting Center, Inc. and is not a substitute for an expert opinion. Please consult your preferred tax and/or legal consultant for the specific details applicable to your circumstances.
By: Garry S. Pagaspas, CPA
With the passage of Revised Corporation Code in Philippines or Republic Act No. 11232 (RA No. 11232) sometime February 2019, One Corporations Corporation (OPC) in Philippines is conceptualized to provide an additional legal structure to facilitate ease of doing business in the Philippines at par with other countries and jurisdictions. Relatively, legal provisions on One Person Corporation Philippines are found in Chapter III of Title VIII of Republic Act No. 11232 and is being implemented by SEC Memorandum Circular No. 7 series of 2019 and going through these rules, features of the One Person Corporation in Philippines could be enumerated as follows:
1. Single stockholder corporation
As the name implies, this corporation is owned by a single stockholder, a natural person of legal age, trust or estate as compared to a now two (2) to fifteen (15) regular domestic corporation in Philippines under the Revised Corporation Code. Such single stockholder would be the sole incorporator for purposes of registering one person corporation in Philippines with Securities and Exchange Commission (SEC), the sole director, and the president, or even a self-appointed treasurer subject to bond requirement. On this aspect, one person corporation in Philippines is easier and less complicated as to documentation on registration.
2. Limited liability corporation
One person corporation in Philippines is a limited liability corporation in same manner as a regular domestic corporation, unlike sole proprietorship with Department of Trade and Industry (DTI) whose liability extend to personal assets of the sole proprietor. This would mean that in general, the single stockholder is liable only to the extent of its capital contribution upon showing that the one person corporation in Philippines is adequately financed with respect to the liabilities of the one person corporation in Philippines. Notably, piercing the veil of corporate entity is likewise applicable to one person corporation.
3. Identifiable as OPC on its name
Regular corporations are required to use on its name a suffix as “corporation” or “corp.” or “incorporation” or “inc.”. to be identified as such regular domestic corporation. In same manner, one person corporation is required to use the suffice “OPC” either below or at the end of its corporate name. Accordingly, you can easily identify a one person corporation and be much conscious that you are dealing with one having a single stockholder only.
4. Allowed to foreign investors but with exclusions
One person corporation is applicable to all, in general, – locals and foreigners who wanted to invest in the Philippines in such allowed areas under foreign investment rules in Philippines such as in business process outsourcing (BPO), knowledge process outsourcing (KPO), rendering services, trading goods, or manufacturing. However, one person corporation in Philippines is not allowed for banks, non-bank financial institutions, quasi-banks, pre-need, trust, insurance, public and publicly listed companies, non-chartered government-owned and controlled corporations (GOCCs), and professionals for practice of such profession, unless, provided under special laws.
5. No minimum paid-up capitalization
A corporation applying for registration with SEC carries with it an application for maximum amount of capitalization it can issue otherwise termed as “authorized capital stock” that could be subscribed (subscribed capital stock) and paid-up (paid-up capitalization), either, fully or partly upon the application for registration or during its lifetime. In registering one person corporation in Philippines, applicant has to declare such proposed authorized capital stock, subscribed and paid-up, but no minimum paid-up capital is required, unless, required by special laws or rules based on the intended operations. For example, lending investor business required a minimum paid-up capitalization of at least P1,000,000.00.
6. Perpetual corporate term, in general
Under the Revised Corporation Code in Philippines, corporate term is now perpetual, unless, the incorporations would intend a definite term, say 50 years. Accordingly, one person corporation’s corporate term is perpetual, in general, unless a term is indicated.
7. Single stockholder but not alone
Here comes the, could be misconception – single stockholder, alone or by itself, may not be able to register a one person corporation in the Philippines. Under the Revised Corporation Code in Philippines, registering one person corporation in Philippines would require appointment of nominee and alternate nominee who would take over the management and operation of one person corporation in Philippines as director and president upon the death or incapacity (permanent or temporary) of the single stockholder. One person corporation in Philippines is likewise required to appoint a corporate secretary (a resident and citizen of the Philippines), treasurer (resident of the Philippines), unless it opted for self-appointed treasurer by posting a surety bond coverage ranging from P1M to P5M plus depending on authorized capitalization, and such other officers.
8. Transferability of shares
While the Revised Corporation Code and the implementing SEC memorandum circular does not expressly provide for the transfer of shares of one person corporation Philippines, a personal view is submitted that shares of stock of one person corporation is transferrable taking into account its corporate features and the suppletory character of regular corporation provisions to one person corporation Philippines. Incidentally, the pro-forma Articles of Incorporation provides for a limitation on the transfer of shares that would support this view on transferability, to the extent that the transferee is allowed foreign equity under investment laws and rules in Philippines.
9. Convertible to regular corporation and vice-versa
The Revised Corporation Code in Philippines provides that a one person corporation in Philippines could be converted to a regular corporation upon notice to the SEC within sixty (60) days from the circumstances leading to conversion, and compliance with such requirements for stock corporation. On the same manner, a regular corporation may be converted to a one person corporation in Philippines when a single stockholder of a regular corporation acquires all the shares of stock and application for one person corporation in Philippines with the SEC. In both instances of conversion, the SEC shall issue a certificate of filing amended articles of incorporation and the converted entity would be legally responsible of the outstanding liabilities as of the conversion.
10. Reportorial requirements
One person corporation in Philippines is required to file with the SEC the following: (a) audited financial statements within 120 days from end of its accounting year, unless total assets or total liabilities does not exceed PhP600k, which financial statements shall be certified under oath by the corporation’s treasurer; (b) Report containing explanations or comments by the President on certain instances provided; (c) Disclosure of self-dealings and related party transactions; and, (d) Other reports SEC may require.
Notably, one person corporation is enticing to use as legal entity taking into account the above basic features and peculiarities based on the author’s personal understanding of the provisions of the Revised Corporation Code and its implementing rules.
Garry is a Certified Public Accountant (CPA) and a law degree holder in tax practice for two (2) decades helping further taxpayers on securing BIR Rulings, appeal of BIR Ruling denials, company registrations in Philippines, tax compliance, tax savings, tax assessments, tax refunds, and other related professional tax services. He has likewise been helping out local and foreign investors/clients determine the most appropriate legal entity to register in the Philippines based on intended operations, the eventual registration of such legal business entity and other related professional services such as securing Ph Visa, payroll, and business consultancy. He was formerly with the academe and is presently a frequent speaker of Tax and Accounting Center, Inc. and other seminar entities.
Disclaimer: This is for purposes of academic discussions only as personally summarized by the author, not of Tax and Accounting Center, Inc. and is not a substitute for an expert opinion. Please consult your preferred tax and/or legal consultant for the specific details applicable to your circumstances. For comments, you may also please send mail at info(@)taxacctgcenter.ph, or you may post a question at Tax and Accounting Center Forum and participate therein.
Revised Corporation Code (RCC) or Republic Act No. 11232 in the Philippines signed into law last February 20, 2019 has introduced major changes in the Corporation Code under Batas Pambansa Bilang 68 in the Philippines and among those are related to personalities and officers. Below is a summary of those in the sequence they appeared in the RCC that you could use as easy reference for dealings with your respective corproations, Securities and Exchange Corporation (SEC), and other related discussions.
1. Incorporators
Incorporators in Philippines are the ones who originally form a corporation. Under the Old Corporation Code (OCC) or Batas Pambansa Bilang 68, an incorporator must be natural persons numbering at least 5 but not more than 15, must own at least one (1) share, and majority of which must be residents. This was changed under the Revised Corporation Code (RCC) or Republic Act No. 11232 as it expanded the 5-15 to not only natural persons but also to juridical persons – i.e., SEC-registered partnerships, SEC-registered association or corporation, and foreign corporations. Natural person incorporator must own at least one (1) share while a juridical-entity incorporation must authorize a representative who would sign on the SEC registration papers through a formal document like a partnership or board resolution. The requirement on majority must be residents of the Philippines was also deleted in the RCC. Finally, an incorporator in a One Person Corporation (a new type of corporation under RCC not found in OCC) must be a natural person only.
2. Board of Directors / Trustees
Board of Directors for stock corporation in the Philippines or Board of Trustees for non-stock, non-profit corporations in Philippines represents the governing body of the corporation through which the corporate powers are exercised directly or through the officers duly authorized by the Board. Revised Corporation Code of the Philippines deleted the requirement that majority of the members must be residents of the Philippines, extended trustees term to three (3) years from one (1) year, allowed stockholders voting through remote communication or in absentia for election of the Board. Board meetings shall now be presided by the Chairman of the Board, or the President in its absence, participated by Members though remote communication (e.g. videoconferencing, teleconferencing, or other alternative modes but cannot attend by proxy.
3. Independent director
Independent directors in Philippine for corporations vested with public interest (e.g. listed companies, banks and quasi-banks, pre-need companies, trust and insurance companies, etc.) is likewise a new inclusion in Revised Corporation Code not found in Old Corporation Code or BP 68, although, this has been existing prior to RCC by virtue of Securities Regulation Code. As defined in the Revised Corporation Code of the Philippines, an independent director in the Philippines is “a person who, apart from shareholdings and fees received from the corporation, is independent of management and free from any business or other relationship which could, or could reasonably be perceived to materially interfere with the exercise of independent judgment in carrying out the responsibilities as a director.
4. Corporate Compliance Officer
If the corporation is vested with vested with public interest, Revised Corporation Code of the Philippines requires the Board of Directors to elect a compliance officer. Again, while this is new in the corporation code, this is not totally new under the Securities Regulation Code and provided for under the Code of Corporate Governance.
5. Corporate President
The corporate president of the corporation in the Philippine is required to be a member of the Board of Director who runs the day-to-day operations of the corporation and perform such acts based on the authority given by the Board of Directors. Under the Revised Corporation Code of the Philippines, the President could preside over board or stockholder’s meeting in the absence of the Chairman of the Board.
6. Corporate Treasurer
Corporate Treasurer is required to be a resident of the Philippines under the Revised Corporation Code of the Philippines but could not be held by the same person acting as President. This would mean that the corporate Treasurer in the Philippines does not need to be a Filipino citizen for as long as it could show proof of residency and to the extent allowed by investment rules. In compliance with corporations filing of annual income tax return in Philippines and annual audited financial statements, a treasurer is required to be a signatory on the statement of management responsibility (SMR).
7. Corporate Secretary
A Corporate Secretary under the Revised Corporation Code of the Philippines is required to be a Filipino Citizen and a resident of the Philippines but could not be held by the same person acting as President. A corporate Treasurer in Philippines could at the same time hold such function as Corporate Secretary. As a corporate officer, functions of Corporate Secretary relates to board and stockholder’s meeting – notices, minutes and certification of such resolutions, among others; stockholdings, related stock certificates and maintenance of stock and transfer book in Philippines; and other administrative functions.
8. Corporation Sole
Under the Revised Corporation Code in Philippines, a corporation sole may be established for religious purposes relative to the administration and management of the affairs, properties and temporalities of the religious institution. It is the chief archbishop, bishop, priest, minister, rabbi, or other presiding elder of such religious institution who could register a corporation sole.
9. Single Stockholder of One Person Corporation
A single corporation is a new type of corporate entity under the Revised Corporation Code in Philippines where a single stockholder could register a corporation, singly but clothed with limited liability in such manner as a regular corporation and not merely as a sole proprietor whose legal entity is attached to the legal personality of the owner. Single stockholder of One Person Corporation in Philippines acts as Sole Director and President at the same time and could even act further as a Treasurer, but subject to a surety bond requirement of SEC. To anticipate worst case scenario on the personality of single stockholder – e.g. death or incapacity, the Revised Corporation Code in Philippines requires designation of the nominee director and alternate nominee director in Philippines who would take place the single stockholder as director and manage the corporation’s affair. Corporate Secretary of One Person Corporation in Philippines and such other officers could likewise be appointed.
10. Resident Agent in Philippines of Foreign Corporation
Resident agent requirement applies for foreign corporations who intend to do business in the Philippines securing with the Securities and Exchange Commission (SEC) a License to do Business in the Philippines and would act as a repository of such summons and other legal processes involving the foreign corporation with respect to its Philippine operations. Resident agent in the Philippines could either be a natural person residing in Philippines of good moral character and sound financial standing or a registered domestic corporation lawfully transacting business in the Philippines and of sound financial standing. Appointment of resident agent could be made through a board resolution of the foreign corporation’s board of director’s while change of Resident Agent would require a process of securing SEC approval on such new appointment.
The above enumeration of corporate personalities and officers in Philippines along with the changes in the rules under the Revised Corporation Code could serve as a guide in familiarizing the nature of their functions and in compliance with the necessary requirements of the SEC, if any. They are not all-inclusive and was simply hand-picked by the author for the purpose of this article.
Section 115. Applicability of Provisions to One Person Corporations. – The provisions of this Title shall primarily apply to One Person Corporations. Other provisions of this Code apply suppletorily, except as otherwise provided in this Title.
Section 116. One Person Corporation. – A One Person Corporation is a corporation with a single stockholder: Provided, That only a natural person, trust, or an estate may form a One Person Corporation.
Banks and quasi-banks, preneed, trust, insurance, public and publicly-listed companies, and non-chartered government owned-and-controlled corporations may not incorporate as One Person Corporations: Provided, further, That a natural person who is license to exercise a profession may not organize as One Person Corporation for the purpose of exercising such profession except as otherwise provided under special laws.
Section 117. Minimum Capital Stock Not Required for One person Corporation. – A One Person Corporation shall not be required to have a minimum authorized capital stock except as otherwise provided by special law.
Section 118. Articles of Incorporation. – A One Person Corporation shall file articles of incorporation in accordance with the requirements under Section 14 of this Code. It shall likewise substantially contain the following:
(a) If the single stockholder is a trust or an estate, the name, nationality, and residence of the trustee, administrator, executor, guardian, conservator, custodian, or other person exercising fiduciary duties together with the proof of such authority to act on behalf of the trust or estate; and,
(b) Name, nationality, residence of the nominee and alternate nominee, and the extent, coverage and limitation of the authority.
Section 119. Bylaws. – The One Person Corporation is not required to submit and file corporate Bylaws.
Section 120. Display of Corporate Name. – A One Person Corporation shall indicate the letters “OPC” either below or at the end of its corporate name.
Section 121. Single Stockholder as Director, President. – The single stockholder shall be the sole director and president of the One Person Corporation.
Section 122. Treasurer, Corporate Secretary, and Other Officers. – Within fifteen (15) days from issuance of its certificate of incorporation, the One Person Corporation shall appoint a treasurer, corporate secretary, and other officers as it may deem necessary, and notify the Commission thereof within five (5) days from appointment.
The single stockholder may not be appointed as the corporate secretary.
A single stockholder who is likewise the self-appointed treasurer of the corporation shall five a bond to the Commission in such sum as may be required: Provided, That the said stockholder/treasurer shall undertake in writing to faithfully administer the One Person Corporation’s funds to be received as treasurer, and to disburse and invest the same according to the articles of incorporation as approved by the Commission. The bond shall be renewed every two (2) years or as often as may be required.
Section 123. Special Functions of the Corporate Secretary. – In addition to the functions designated by the One Person Corporation, the corporate secretary shall:
Section 124. Nominee and Alternate Nominee. – The single stockholder shall designate a nominee and an alternate nominee who shall, in the event of the single stockholder’s death or incapacity, take the place of the single stockholder as director and shall manage the corporation’s affairs.
The articles of incorporation shall state the names, residence address and contact details of the nominee and alternate nominee, as well as the extent and limitations of their authority in managing the affairs of the One Person Corporation.
The written consent of the nominee and alternate nominee shall be attached to the application for incorporation. Such consent may be withdrawn in writing any time before the death of the single stockholder.
Section 125. Term of Nominee and Alternate Nominee. – When the incapacity of the single stockholder is temporary, the nominee shall sit as director and manage the affairs of the One Person Corporation until the stockholder, by self determination, regains the capacity to assume such duties.
In case of death or permanent incapacity of the single stockholder, the nominee shall sit as director and manage the affairs of the One Person Corporation until the legal heirs of the single stockholder have been lawfully determined, and the heirs have designated one of them or have agreed that the estate shall be the single stockholder of the One Person Corporation.
The alternate nominee shall sit as director and manage the One Person Corporation in case of the nominee’s inability, incapacity, death, or refusal to discharge the functions as director and manager of the corporation, and only for the same term and under the same conditions applicable to the nominee.
Section 126. Change of the Nominee or Alternate Nominee. – The single stockholder may, at any time, change its nominee and alternate nominee by submitting to the Commission the names of the new nominees and their corresponding written consent. For this purpose, the articles of incorporation need not be amended.
Section 127. Minutes Book. – A One Person Corporation shall maintain a minutes book which shall contain all actions, decisions, and resolutions taken by the One Person Corporation.
Section 128. Records in Lieu of Meetings. – When action is needed on any mater, it shall be sufficient to prepare a written resolution, signed and dated by the single stockholder, and recorded in the minutes book of the One Person Corporation. The date of recording in the minute book shall be deemed to be the date of the meeting for all purposes under this Code.
Section 129. Reportorial Requirements. – The One Person Corporation shall submit the following within such period as the Commission may prescribe:
For purposes of this provision, the fiscal year of a One Person Corporation shall be that set forth in its articles of incorporation, or in the absence thereof, the calendar year.
The Commission may place the corporation under delinquent status should the corporation fail to submit the reportorial requirements three (3) times, consecutively or intermittently, within a period of five (5) years.
Section 130. Liability of Single Shareholder. – A sole shareholder claiming limited liability has the burden of affirmatively showing that the corporation is adequately financed.
Where the single stockholder cannot prove that the property of One Person Corporation is independent of the stockholder’s personal property, the stockholder shall be jointly and severally liable for the debts and other liabilities of the One Person Corporation.
The principles of piercing the corporate veil applies with equal force to the One person Corporations as with other corporations.
Section 131. Conversion from an Ordinary Corporation to a One Person Corporation. – When a single stockholder acquires all the stocks of an ordinary stock corporation, the latter may apply for conversion into One Person Corporation, subject to the submission of such documents as the Commission may require. If the application for conversion is approved, the Commission shall issue a certificate of filing amended articles of incorporation reflecting the conversion. The One Person Corporation converted from an ordinary stock corporation shall succeed the latter and be legally responsible for all the latter’s outstanding liabilities as of the date of conversion.
Section 132. Conversion from a One Person Corporation to an Ordinary Stock Corporation. – A One Person Corporation may be converted into an ordinary stock corporation after due notice to the Commission of such fact and of the circumstances leading to the conversion, and after compliance with all other requirements for stock corporations under this Code and applicable rules. Such notice shall be filed with the Commission within sixty (60) days from the occurrence of the circumstances leading to the conversion into an ordinary stock corporation. If all the requirements have been complied with, the Commission shall issue a certificate of filing an amended articles of incorporation reflecting the conversion.
In case of death of the single stockholder, the nominee or alternative nominee shall transfer the shares to the duly designated legal heir or estate within seven (7) days from receipt of either an affidavit of heirship or self-adjudication executed by sole heir, or any other legal document declaring the legal heirs of the single stockholder and notify the Commission of the transfer. Within sixty (60) days from the transfer of shares, the legal heirs shall notify the Commission of their decision to either wind up and dissolve the One Person Corporation or convert it into an ordinary stock corporation.
The ordinary stock corporation converted from One Person Corporation shall succeed the latter and be legally responsible for all the latter’s outstanding liabilities as of the date of conversion.
← Previous Next →
See our quality seminars, workshops, and trainings…
See how we can help you with our other professional services : company registrations; Ph Working Visa; and HR Services
Get to know more about us…
Read More Articles…
SAMPLE ONLY FOR A ONE PERSON CORPORATIONWITH A SINGLE STOCKHOLDER WHO IS A NATURAL PERSON
Articles of Incorporation
of
___________________________________, OPC
(Name of One Person Corporation)
The undersigned, of legal age, voluntarily forms a One Person Corporation (OPC) under the laws of the Republic of the Philippines and certifies the following:
First: That the name of said corporation shall be ________________________________, OPC;
Second: That the purpose or purposes for which such corporation is incorporated are: (If there are more than one purpose, indicate primary and secondary purposes);
Third: That the principal office of the OPC is located in ___________________________________________________________________;
Fourth: That the OPC shall have perpetual existence;
(If the OPC has a specific term of existence): That the OPC shall have a term of existence of _________ years from the date of issuance of the certificate of incorporation;
State the specific term of existence in words followed by the figure enclosed in parentheses, e.g. fifty (50) years.
Fifth: That the name, nationality, and residence address of the single stockholder/ director/ president of the OPC are as follows:
Name
__________________
Nationality
Residence
(Specific)
Sixth: That the names, nationalities, and residence addresses of the nominee and alternate nominee are as follows:
Seventh: That the authorized capital stock of the OPC is ______________ Pesos (P____________), divided into ____________ shares with par value of _____________________ Pesos (P_______) per share.
(In case all the shares are without par value): That the capital stock of the OPC is _____________ shares without par value.
(In case some shares have par value and some are without par value): That the capital stock of said corporation consists of __________ shares, of which __________ shares have a par value of ________________ Pesos (P________) each, and of which ____________ shares are without par value.
Eighth: That the number of shares of the authorized capital stock above-stated has been subscribed as follows:
Ninth: a) That as self-appointed treasurer of the OPC, I acknowledge to have received in the name and for the benefit of the corporation, all subscriptions paid or given by the subscriber, who certifies the information set forth in the seventh and eighth clauses above, and that the paid-up portion of the subscription in cash and/or property has been duly received for the benefit and credit of the corporation, and that I shall faithfully administer the corporation’s funds to be received as Treasurer, and to disburse and invest the same in accordance with law and these Articles of Incorporation;
Or:
b) That as Treasurer of the OPC, I acknowledge to have received in the name and for the benefit of the corporation, all subscriptions paid or given by the subscriber, who certifies the information set forth in the seventh and eighth clauses above, and that the paid-up portion of the subscription in cash and/or property has been duly received for the benefit and credit of the corporation, and that I shall faithfully administer the OPC’s funds to be received as Treasurer, and to disburse and invest the same in accordance with law and these Articles of Incorporation;
c) That within fifteen (15) days from the issuance of its certificate of incorporation, the OPC shall appoint a treasurer and notify the Commission thereof within five (5) days from appointment.
Choose only the applicable paragraph, i.e. a) if the single stockholder acts as the treasurer; b) if another person has been appointed as treasurer; and c) if the single stockholder has yet but commits to appoint a treasurer after receipt of the certificate of incorporation.
Tenth: That I undertake to change the name of the OPC immediately upon receipt of notice from the Commission that another corporation, partnership or person has acquired a prior right to the use of such name, that the name has been declared not distinguishable from a name already registered or reserved for the use of another corporation, or that it is contrary to law, public morals, good customs or public policy.
Eleventh: That no transfer of stock or interest which shall reduce the ownership of Filipino citizens to less than the required percentage of capital stock as provided by existing laws shall be allowed or permitted to be recorded in the proper books of the OPC, and this restriction shall be indicated in all stock certificates issued by the corporation.
Twelfth: That the fiscal year of the OPC shall begin on the __________ day of ____________ and shall end on the __________ day of ____________of each year. (If not stated in the Articles of Incorporation, it is understood that the fiscal year of said corporation follows the calendar year.)
IN WITNESS WHEREOF, I have hereunto signed these Articles of Incorporation, this __________ day of ____________, 20________ in the City/Municipality of ___________________, Province of ______________________, Republic of the Philippines.
_______________________________________
(Name and signature of the incorporator)
TIN: __________________________
________________________________________
(Name and signature of the treasurer)
Nominee and alternate nominee need not sign the Articles of Incorporation but written consent of the nominee and alternate nominee shall be attached to the application for incorporation. Such consent may be withdrawn in writing any time before the death or incapacity of the single shareholder.
ACKNOWLEDGEMENT
REPUBLIC OF THE PHILIPPINES)
S.S)
BEFORE ME, a Notary Public, for and in __________________, Philippines, this ___________ day of _______________, 2019, personally appeared the following persons:
TIN/ Passport No.
Date and Place Issue
known to me and to me known to be the same persons who executed the foregoing Articles of Incorporation constituting of ________ pages, including this page where the acknowledgement is written, and they acknowledged to me that the same is their free act and voluntary deed.
WITNESS MY HAND AND SEAL on the day first above-written.
NOTARY PUBLIC
Doc. No. ______;
Page No. ______;
Book No. ______;
Series of ______.
Reference: SEC Samples under SEC MC No. 7-2019
SAMPLE ONLY FOR A ONE PERSON CORPORATIONUNDER THE NAME OF AN ESTATE OR TRUSTEE
Fifth: That the name, nationality, and residence address of the (trustee, administrator, executor, guardian, conservator, custodian, or any other person exercising fiduciary duties) are as follows:
(Attach proof of authority to act on behalf of the trust or estate.)
b) That as Treasurer of the OPC, I acknowledge to have received in the name and for the benefit of the corporation, all subscriptions paid or given by the subscriber, who certifies the information set forth in the seventh and eighth clauses above, and that the paid-up portion of the subscription in cash and/or property has been duly received for the benefit and credit of the corporation, and that I shall faithfully administer the corporation’s funds to be received as Treasurer, and to disburse and invest the same in accordance with law and these Articles of Incorporation;
Nominee and alternate nominee need not sign the Articles of Incorporation, but written consent of the nominee and alternate nominee shall be attached to the application for incorporation. Such consent may be withdrawn in writing any time before the death or incapacity of the single shareholder.
SAMPLE OF ACCEPTANCE LETTER OF THE NOMINEE
AND ALTERNATE NOMINEE OF THE ONE PERSON CORPORATION
Date: ____________
To: (Name of single stockholder)
(Name of the One Person Corporation)
(Address of the One Person Corporation)
Dear Mr./Ms. ____________:
I am writing to confirm my acceptance of the offer to be your designated nominee (or alternate nominee), in compliance with the requirement of the Revised Corporation Code of the Philippines for the purpose of registration of your One Person Corporation with the Securities and Exchange Commission.
I have understood the extent and limitations of my authority as nominee (or alternate nominee) in the event that I am called to manage the affairs of the One Person Corporation, as we discussed.
Thank you.
Very truly yours,
____________________________________________
(Signature and name of nominee or alternate nominee)
Note: The nominee and alternate nominee can sign their names in the same letter as acceptance of their nomination.
SAMPLE FORM OF NOTICE TO CHANGE NOMINEE/
ALTERNATE NOMINEE OF THE ONE PERSON CORPORATION
Date: ___________
Company Registration and Monitoring Department
Securities and Exchange Commission
Secretariat Building, PICC Complex
Roxas Blvd., Pasay City
Gentlemen:
In compliance with the requirement of Section 126 of the Revised Corporation Code of the Philippines, the undersigned hereby notifies the Securities and Exchange Commission of a change in the nominee and alternate nominee of ____________________________________________, OPC, as indicated in the Articles of Incorporation, under SEC Reg. No. _________________.
I, therefore, submit the names of the new nominees and their written consent as follows:
I consent to my appointment as Nominee:
I consent to my appointment as Alternate Nominee:
_______________________
(Signature of the nominee)
TIN: ________________
(Signature of the alternate)
Certified Correct:
___________________________________
(Signature and name of the single stockholder/president)
SUBSCRIBED AND SWORN TO before me in _______________ on ______________ by the above-named individual as the Single Stockholder/President of the OPC who personally appeared before me and exhibited to me his/her competent evidence of identity consisting of ________________ issued on _______________.
Live Webinar on Ph Payroll Computations and Taxation
Live Webinar: Input VAT Refund
Live Webinar: Winning BIR Tax Assessments Series: Process, Remedies & Writing Effective Protest
Onsite Training: PEZA Registered Entities: Taxation and Basic Reports
Live Webinar: Returns and Reports Preparation under eBIR Forms and Online Submissions
Live Webinar: Basic Bookkeeping Refresher Course
Live Webinar: Withholding Taxes, Subjects & Applications
Live Webinar: Value Added Tax: In and Out
Live Webinar: SEC Dividend Declarations
Onsite Training: Basic Bookkeeping for Non-Accountants
Revenue Regulations No. 014-2025 – VAT on Digital Services
Revenue Memorandum Circular No. 34-2025
Revenue Memorandum Circular No. 32-2025
Revenue Regulations No. 13-2025
Republic Act No. 12079
Δ
Phone : (02) 5310-2239
Mobile : Smart: 0939-916-2952 Globe: 0967-497-4989
Email : info(@)taxacctgcenter.ph
© Tax and Accounting Center 2025. All Rights Reserved