Following the effectivity of Republic Act (RA) No. 11232, or the Revised Corporation Code of the Philippines, the Securities and Exchange Commission (SEC) recently issued Memorandum Circular No. 7-2019, providing guidelines on establishing a One Person Corporations (OPC).
An OPC is a corporation with a single stockholder who can be a natural person, trust, or estate. The natural person must be of legal age, and the trustee or administrator must show proof of authority to act in behalf of the trust or estate.
To register, an OPC need only to file its Articles of Incorporation. The Articles, in accordance with Section 14 of RA No. 11232, shall indicate the OPC’s primary purpose, principal office address, term of existence, names and details of the single stockholder, the nominee and alternate nominee and the authorized, subscribed and paid-up capital, and such other matters consistent with the law and which may be deemed necessary and convenient. An OPC need not file and submit its Bylaws upon incorporation.
An OPC is also not required to have minimum authorized capital stock and, unless otherwise required by applicable laws or regulations, no portion of the authorized capital is required to be paid up at the time of incorporation.
While the single stockholder will automatically be the sole director and president, OPCs shall also appoint their own treasurer, corporate secretary, and other officers within 15 days from the issuance of its Certificate of Incorporation and shall subsequently notify the SEC within five days from appointment.
For single stockholders who are also treasurer of the OPC, a surety bond computed based on the authorized capital stock of the OPC, shall also be required. This bond shall be renewed every two years upon review of the annual submission of Audited Financial Statements.
SEC Memorandum Circular No. 7-2019 also reminded that professionals are prohibited from organizing an OPC to exercise their profession. Banks, non-bank financial institutions, and quasi-banks, as well as pre-need, trust, insurance, public and publicly listed companies and non-chartered government-owned and -controlled corporations cannot incorporate as OPCs. Foreign natural persons can register as an OPC; however, their registration subject to existing capital requirements and constitutional restrictions on foreign participation in certain investment activities.
P&A Grant Thornton
Certified Public Accountants
P&A Grant Thornton is the Philippine member firm of Grant Thornton International Ltd
As published in SunStar Cebu, dated 15 May 2019