How to Register a One-Person Corporation in the Philippines
Local and foreign enterprises wishing to establish a business in the Philippines without needing multiple shareholders can opt to register their business as a One-Person Corporation.
What is a One-Person Corporation?
In 2019, the Philippine government released the Revised Corporation Code (RCC) to further support the growing economic development in the Philippines. One of its significant revisions introduced a new business entity called the One-Person Corporation (OPC).
The OPC business structure allows a single entrepreneur or individual to form a corporation without needing shareholders or a board of directors. This makes the owners the sole shareholder, acting director, and president.
Moreover, to be eligible to register as an OPC, entities must be either a natural person of legal age*, a trust**, or an estate.
*A foreign natural person may set up an OPC but is subject to limitations in areas of investment partially or wholly restricted from foreign participation or as specified in the Foreign Investment Negative List (FINL).
**The trust does not refer to a trust entity, but to the subject managed by a trustee.
What are the features of an OPC?
OPCs foster many advantages for entrepreneurs as they provide an easier way to establish a business in the country. Such allows a single person to register as an OPC, reduce the minimum capital requirement, limit the liability for business owners, and many more.
Entrepreneurs who register as an OPC can enjoy the following features:
- Limited Liability. An OPC ensures that only the company is liable for its debts and obligations. Any personal or external asset is separate from the entity.
- Perpetual Existence. Formerly, a corporation is generally limited to a 50-year lifespan with a chance for renewal with the Securities and Exchange Commission (SEC). With the RCC, corporations are now allowed to perpetually exist unless stated otherwise in their Articles of Incorporation (AOI).
- No Minimum Capital Requirement. The RCC removed the need for a minimal capital requirement for setting up an OPC in the Philippines.
- Open to Foreign Investors. Foreign entrepreneurs can opt to register their business as an OPC. However, restrictions may arise depending on the industry you’re planning to engage in.
- Complete Control of Business. Given that an OPC can operate without needing multiple stakeholders or a board of directors, the director can take total control over the company.
How to Set Up a One-Person Corporation
Entrepreneurs seeking to establish an OPC in the Philippines must submit all applications and transactions with SEC, either manually through their Company Registration and Monitoring Department (CRMD) or online through the SEC eSPARC.
Generally, the OPC registration process follows a 5-step process:
- Submit your proposed company name
- Submit the documentary requirements for pre-processing
- Pay the filing fees
- Submit hard copies of signed and notarized documentary requirements together with the proof of payment of filing fees
- Claim Certificate of Registration from SEC
Moreover, single stakeholders must appoint a treasurer, corporate secretary, and other officers within 15 days of issuing the Certificate of Registration. They must also notify SEC of the appointment within five days.
Documentary Requirements for Registering an OPC
Before proceeding with registering your business, you must secure the following documents and submit them along with your application with the SEC:
- Articles of Incorporation (Natural Person, Trust or Estate)
- Written Consent from the Nominee and Alternate Nominee
- Other requirements (if applicable), such as:
- 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 persons)
- Affidavit of Undertaking to Change Company Name (in case not included in the Articles of Incorporation)
- Tax Identification Number (TIN) for Filipino single stockholder
- Tax Identification Number (TIN) or Passport Number for Foreign single stockholder
Upon registration, there are several filing and miscellaneous fees you should take note of to complete your OPC application:
- Name Reservation – ₱100.00 per company name and trade name
- Articles of Incorporation – 1/2 of 1% of the authorized capital stock but not less than ₱2,000.00
- Legal Research Fee (LRF) – 1% of the Registration/Filing Fee but not less than ₱20.00
- FIA Application Fee – ₱3,000.00 if the single stockholder is a foreigner
- Documentary Stamp – ₱30.00
Set Up Your Next Business Venture With Ease
Setting up an OPC enables you to fully take control of your business, allowing you to carry out your vision freely. As the Philippine economy continues to grow, business incentives, such as fiscal and non-fiscal incentives, are a good thing to consider when starting a business in the country.
Starting a business can be overwhelming. If you find these procedures too complex, reaching out to comprehensive business consulting firms is ideal to help guide you through your company formation process.
Need Help in Registering Your Business in the Philippines?
InCorp Philippines has registered hundreds of local and foreign companies in the Philippines. Our full spectrum of corporate services is guaranteed to help you enjoy a seamless business registration process.