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SETTING UP A ONE PERSON CORPORATION


Source: https://www.alburolaw.com/setting-up-a-one-person-corporation

The Old Corporation Code (Batas Pambansa Bilang 68) required that for setting up a corporation, there must at be least five (5) incorporators. However, with the Revised Corporation Code (Republic Act No. 11232) which was approved last 20 February 2019, a single incorporator can set up a corporation.  It is called One Person Corporation (OPC).

What is a One Person Corporation?

As defined by the law, One Person Corporation is a corporation with a single stockholder. Only a natural person, trust, or an estate are permitted to form a One Person Corporation.

Who are not allowed to Form OPCs?

The following are not permitted to form OPC:

  1. Banks and quasi-banks, pre-need, trust, insurance, public and publicly-listed companies, and non-chartered government-owned; and
  2. A natural person who is licensed to exercise a profession may not organize as a One Person Corporation for the purpose of exercising such profession except as otherwise provided under special laws.

What are the Special Features of a One Person Corporation?

The following sets a One Person Corporation different from an ordinary stock corporation:

  1. The One Person Corporation is not required to submit and file corporate by-laws.
  2. A One Person Corporation shall indicate the letters “OPC” either below or at the end of its corporate name.
  3. The single stockholder shall be the sole director and president of the One Person Corporation.
  4. The single stockholder may not be appointed as the corporate secretary.
  5. A One Person Corporation shall not be required to have a minimum authorized capital stock except as otherwise provided by special law.
  6. The single stockholder may not be appointed as the corporate secretary.
  7. A single stockholder is likewise the self-appointed treasurer of the corporation.
  8. The single stockholder or treasurer shall give a bond to the Commission in such a sum as may be required.

The single stockholder or treasurer must also 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.

  1. 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 addresses 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 or incapacity of the single stockholder.

  1. Records in Lieu of Meetings

When action is needed on any matter, 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 minutes book shall be deemed to be the date of the meeting for all purposes under this Code.

What Are the Requirements for Setting Up A One Person Corporation?

  1. Cover Sheet
  2. Articles of Incorporation for One Person Corporation (Natural Person, Trust or Estate)
  3. Written Consent from the Nominee and Alternate Nominee
  4. Other Requirements, if applicable:
    • Proof of Authority to Act on Behalf of the Trust or Estate (for trusts and estates incorporating as OPC)
    • Foreign Investments Act (FIA) Application Form (for foreign natural person)
    • Affidavit of Undertaking to Change Company Name, in case not incorporated in the Articles of Incorporation
    • Tax Identification Number (TIN) for Filipino single stockholder
    • Tax Identification Number (TIN) or Passport Number for Foreign single stockholder
  5. Filing Fees
    • Name Reservation – Php100.00 per company name and/or trade name
    • Articles of Incorporation -1/5 of 1% of the authorized capital stock but not less than Php2,000.00
    • Legal Research Fee (LRF) – 1% of the Registration/Filing Fee but not less than Twenty Pesos (Php20.00)
    • FIA Application Fee – Php3,000.00, if the single stockholder is a foreign national.
    • Documentary Stamp – Php30.00

How to Apply for Registration?

  1. Initially, all name reservation requests shall be submitted manually at the SEC Head Office. CRMD personnel verifies the proposed company name; trade/business names by the applicant:

If denied, the applicant needs to submit letter of appeal for rejected names subject to the approval of the CRMD appeal officer.

  1. Submit Articles of Incorporation with attached written consent of the nominee and alternate nominee and other requirements required for registration, for preprocessing.
  1. Pay the Filing Fees (Registration Fee, LRF and Name Reservation Fee).
  1. Submit hard copies of signed and notarized documents together with the proof of payment of filing fees at CRMD Receiving Unit.
  1. Receive the Approved Certification of Registration as One Person Corporation.
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