As of 6 May, PH SEC Will Register One Person Corporations

Want to start a small business while enjoying a corporation’s benefits? Read on then.

 

Under the Revised Corporation Code (RCC), Filipino entrepreneurs may organize one-person corporations (OPC’s). These have just one stockholder and enjoy the rights and privileges that conventional corporations are entitled to.

 

Prior to the RCC, corporations required a Php5,000 minimum paid-up capital and at least five incorporators. The capital requirement doesn’t really pose a problem, but finding five competent AND trustworthy partners is a different story. We all know that even the best familial and friendly ties are no safeguard against integrity issues, especially when there is money on the table.

 

The latest RCC, ratified last February, could very well change the game.

 

One-Person Corporation Registration Process

One-Person Corporation Registration Process  

Anyone of legal age can register a business with the Securities and Exchange Commission (SEC). To apply as an OPC, you need to submit a cover sheet, articles of incorporation, and the single stockholder’s written consent, plus an alternate.

 

OPC applicants must secure a business name from the SEC as well. Furthermore, existing stock corporations may convert to OPC’s under the RCC.

 

The sole stockholder automatically becomes the OPC’s sole director and president. The OPC must also appoint a treasurer, corporate secretary, and other such officers within five days of its incorporation. It should then inform the SEC about such appointments once they are made.

 

Finally, OPC’s don’t have to put up a minimum authorized capital stock, unless the law requires it.

 

Benefits

Benefits

Image Credit: opstart.ca

 

Micro and small enterprises would benefit the most from the OPC scheme. This grants them the best of both worlds: agility and absolute power, as well as limited liability.

 

Speaking of absolute power, the sole stockholder may concurrently serve as his/her company’s director, president, corporate secretary, and treasurer.

 

Traditional corporations, in contrast, cannot appoint the same person to certain positions. Most notably, an incorporator can’t be both corporate secretary and treasurer in a non-OPC.  

As a bonus, OPC’s don’t have to submit and file their by-laws.

 

Exemptions

Exemptions

Image Credit: careermovesgroup.co.uk

 

The OPC scheme isn’t without its restrictions, of course. Banks, insurance firms, publicly-listed companies, uncharted government-owned and controlled corporations, and similar entities cannot register as OPC’s. Stricter regulations apply to these firms, hence the OPC restriction.

 

Lastly, the OPC should be adequately funded and truly separate from the sole stockholder’s personal property. Failing to prove such voids the limited liability, thus rendering the stockholder jointly and fully liable for the OPC’s debts.

 
Serena Estrella

Serena joined Remit back in 2016, and has tormented its Marketing Head constantly ever since. To get through the rigors of writing about grave concerns like exchange rates, citizenship requirements, and PH-AU news, she likes to blast Mozart, Vivaldi, ONE OK ROCK, and Shigeru Umebayashi in the background. She does a mean Merida voice in her spare time too.

Comments
SHOW 0 COMMENTS

Leave A Comment

Your email address will not be published. Required fields are marked *