SETTING UP A ONE PERSON CORPORATION IN THE PHILIPPINES 2019 (Definition and Incorporation)
By Camille Andal
May 15, 2019
Welcome to my first blog!
I’ll try to keep my posts short but informative. I’m not a chatter myself, so I think I’ll be fine.
This May, the Securities and Exchange Commission released SEC Memorandum Circular No. 7 (MC No. 7-2019) – Guidelines on the Establishment of a One Person Corporation (OPC).
It is essentially the definition and initial guidelines for Republic Act 11232, the Act providing for the Revised Corporation Code of the Philippines, or RCC, signed by President Rodrigo Duterte last February 23, 2019. The RCC removed the absolute requirement of having a minimum of five (5) individuals in the formation of corporations.
I summarized some of the key takeaways from MC No. 7-2019 below. My thoughts are in italics.
Reference: http://www.sec.gov.ph/wp-content/uploads/2019/05/2019MCNo07.pdf
For accounting and tax services, browse our page: http://camille.rwolftech.com/
I’ll try to keep my posts short but informative. I’m not a chatter myself, so I think I’ll be fine.
This May, the Securities and Exchange Commission released SEC Memorandum Circular No. 7 (MC No. 7-2019) – Guidelines on the Establishment of a One Person Corporation (OPC).
It is essentially the definition and initial guidelines for Republic Act 11232, the Act providing for the Revised Corporation Code of the Philippines, or RCC, signed by President Rodrigo Duterte last February 23, 2019. The RCC removed the absolute requirement of having a minimum of five (5) individuals in the formation of corporations.
I summarized some of the key takeaways from MC No. 7-2019 below. My thoughts are in italics.
- OPC is a corporation with a single stockholder, who can only be a natural person, trust or estate.
- Banks, non-bank financial institutions, quasi-banks, pre-need, trust, insurance, public and publicly listed companies, non-chartered government-owned and -controlled corporations (GOCCs) cannot incorporate as OPC.
- A natural person who is licensed to exercise a profession may not organize as an OPC for the purpose of exercising such profession except as otherwise provided under special laws .
- A foreign natural person may put up an OPC, subject to the applicable capital requirement and constitutional and statutory restrictions on foreign participation in certain investment areas or activities.
- Suffix "OPC" should be indicated by the one person corporation either below or at the end of its corporate name.
- The single stockholder is required to designate a nominee and an alternate nominee named in the Articles of Incorporation who shall replace the single stockholder in the event of the latter's death and/or incapacity. The written consent of both the nominee and alternate nominee shall be attached to the application for incorporation.
- The OPC is not required to submit and file its By-laws.
- Within fifteen (15) days from the issuance of its Certificate of Incorporation, the OPC shall appoint a Treasurer, Corporate Secretary, and other officers, and notify the SEC thereof within five (5) days from appointment. The single stockholder shall not be appointed as Corporate Secretary but may assume the role of a Treasurer.
- The single stockholder who assumes the position of the Treasurer shall post a surety bond to be computed based on the authorized capital stock (ACS). Based on the given information, this can be prevented by appointing a person other than the single stockholder as the Treasurer.
- The OPC must submit the following documents within the period required by the SEC: annual audited financial statements; provided, that if the total assets or total liabilities of the corporation are less than six hundred thousand pesos (P600,000.00), the financial statements shall be certified under oath by the corporation's treasurer, a disclosure of all self-dealings and related party transactions entered into between the OPC and the single stockholder, other reports as the SEC may require.
Reference: http://www.sec.gov.ph/wp-content/uploads/2019/05/2019MCNo07.pdf
For accounting and tax services, browse our page: http://camille.rwolftech.com/
