CORPORATION

A corporation is a kind of business that is owned by its shareholders, who elect a board
of directors to manage the organization's operations. The corporation is responsible for the
company's activities and finances; the shareholders are not. Corporations can be for-profit, like
businesses, or non-profit, like charity organizations

Process to register a Corporation in The Philippines

The extensive registration process will be fulfilled when these eight steps are completed.

1. Verification of corporate name with SEC via the SEC Company Registration System.
2. Drafting and execution of the Articles of Incorporation with the assistance of a competent
legal counsel.
3. Deposit of cash received for subscribed shares of stocks in a banking institution in the
name of the temporary treasurer-in-trust-for account.
4. Filling of the Articles of Incorporation at the SEC together with the following:
 Treasurer’s affidavit
 Statement of assets and liabilities of the proposed corporation.
 Bank Certificate of Deposit of cash paid for subscription
 Personal information sheet of the incorporators which is autogenerated after
completing the SEC Company Registration System.
5. Payment of filing and publication fees. A payment form is generated after completing the
SEC Company Registration System.
6. Issuance by SEC of the certificate of incorporation.
7. Obtaining municipal licenses from the local government
8.  Registration with the BIR

Requirements

1. Name Reservation and Payment Form

 The Name Reservation and the Payment Form is done through the SEC
Company Registration System (https://crs.sec.gov.ph). This is the online process
that verifies the company name and allows the payment of fees.

2. Notarized Articles of Incorporation and By-laws

 The SEC Company Registration System produces a proforma Articles of
Incorporation and By-law. This may also be drafted by a lawyer. Don’t forget to
get it notarized by a notary public.

3. Treasurer’s Affidavit

 The corporate treasurer prepares this document and certifies the amounts
subscribed and paid by the incorporators for stock corporations.
 4. Bank Certificate of Deposit or Proof of Inward Remittance

 Once the Articles of Incorporation and By-laws are drafted, you need to open the
Treasurer In Trust For (TITF) account with your preferred bank.
A TITF account serves as the temporary depository account of the required paid-up
capital of the corporation.
The TITF needs to be someone based in the Philippines, specifically within the
locality of your bank. The Corporate Treasure and Treasure-In-Trust may or may not be
the same person. The Treasurer-In-Trust is temporary and may be changed later on
upon the completion of the process.

5. Lease Agreement

 You’ll need to have a corporate address and lease agreement. The address will
need to be placed in your Articles of Incorporation.

6. Statement of Assets and Liabilities

 This shows the financial health of a corporation.

7. Duly accomplished SEC Form F-100

 For corporations with more than 40% foreign equity, they must fulfill a SEC Form
F-100 which is an Application to do Business under the Foreign Investment Act
of 1991 (mandated by R.A. 7042).
R.A. 7042 allows only 40% of the capital stock outstanding and entitled to vote is owned
and held by non-Filipinos (See: https://boi.gov.ph/r-a-7042-foreign-investments-act-of-
1991/)

Pros of a Corporation

 Corporations, like other forms of organizations, provide liability protection for its owners,
known as shareholders.
 Companies that want to raise money from investors will have an easier time doing so if
they are incorporated and can sell ownership shares.
 Corporate profits are taxed, but at a lower rate than individuals' personal income taxes.
 Working for a corporation, with the prospect of ownership benefits, may be more
appealing to potential employees than working for a privately held company.
 The company can provide a medical reimbursement plan to its employees, deducting the
cost of providing insurance while allowing them to use the benefit tax-free.
Cons of a Corporation

 Creating a corporation is time-consuming and costly.

 Corporations spend significant sums of money to stay on top of changing business
regulations and timely filing of paperwork once they have been established. They're best
for large companies with a lot of employees.
 Corporations pay federal, state, and sometimes local taxes on their profits.
 Dividends paid to shareholders are taxed by the corporation, which is then taxed by the
shareholders.