With the implementation of the Revised Corporation Code (Republic Act No.

11232), the Philippines now

allows the establishment of One Person Corporations (OPC).

Who can register it, and what are the key benefits, requirements, and restrictions? In this article, we
have covered the essential facts you need to know about One Person Corporation in the Philippines.

What is One Person Corporation?

On 6 May 2019, the Securities and Exchange Commission of the Philippines (SEC) started accepting
applications for registering a company in the Philippines with only one shareholder.

In other words, it is now possible to register a company in the Philippines without the need for four
other shareholders or a board of directors.

This type of company is classified as a One Person Corporation (OPC), and it is especially beneficial for
micro, small, and medium-sized businesses.

One of the key benefits of an OPC is that unlike in sole proprietorship where there is no distinction
between the owner and the business, and the owner is financially liable for all  debts and losses,
the shareholder’s liability in an OPC is limited to the extent of the shareholder’s assets.

To distinguish One Person Corporations from other companies, the corporate name of an OPC must
indicate the suffix ‘OPC’ either below or at the end of its name.

Who can register a One Person Corporation in the Philippines?

The single shareholder of an OPC can be a:

 Natural person

 Trust

 Estate

If the incorporator is a natural person, he or she must be of legal age. Also, note that natural persons
who are licensed to exercise a profession are not allowed to operate as an OPC. For example,
accountants or lawyers.

The term of existence of an OPC is indefinite or defined in the Articles of Association. However, if the
shareholder is a trust or an estate, its term of existence is co-terminus with the existence of the trust or
estate.

Differences Between OPCs and Sole Proprietorships

Before the approval of the Revised Corporation Code, most entrepreneurs who were unable to find
business partners to meet the five-person requirement would opt to register their business as a sole
proprietorship.

Entrepreneurs registering as sole proprietors mean that they become personally liable for all the risks
that their businesses take. In other words, the assets of the business and the entrepreneur are treated
as the same, making it risky for a sole proprietor’s personal resources.
That risk doesn’t apply to an entrepreneur registering as an OPC. As an OPC, a business owner can claim
limited liability, which means that the company’s assets and the owner’s personal assets are treated
separately. Should a business go under debt, creditors of sole proprietors can demand for an
entrepreneur’s personal assets, whereas OPCs only stick to the assets invested in the company.

As OPCs are corporations, they have a fixed income tax rate of 30%. Sole proprietors are treated as
individuals when taxed, which means their applicable rates would vary depending on their gross sales.

Which industries are forbidden for One Person Corporations?

OPCs are not allowed for banks, financial institutions, and other financial entities.

Insurance companies, public and publicly listed companies and government-owned and -controlled
corporations are also prohibited from establishing a One Person Corporation.

Can a foreigner register a One Person Corporation?

Yes, foreign investors can also set up One person Corporations in the Philippines. However, they are still
subject to the Philippines’ Foreign Investment Negative List (FINL), and the industry they choose must
allow full foreign ownership.

Requirements for One Person Corporation in the Philippines

Minimum paid-up capital requirement

There is no minimum capital requirement for setting up a One Person Corporation, and no portion of
authorized capital is required to be paid up at the time of incorporation unless a special law or
regulation requires otherwise.

Nominee of a One Person Corporation

When setting up an OPC in the Philippines, the single stockholder must also designate a nominee and an
alternate nominee who will replace the stockholder in the event of the latter’s death or incapacity.

The nominees must also be named in the Articles of Incorporation, and the written consent of both the
nominee and alternate nominee must be attached to the application for the incorporation.

The single stockholder may at any time change its nominee and alternate nominee by submitting the
names of the new nominees and corresponding written consent to the Commission.

In case of incapacity or death of the single stockholder, the nominee will take over the management of
the OPC until the end of the inability of the stockholder or until the new shareholder is determined.

Corporate officers of One Person Corporations

Once your One Person Corporation in the Philippines is registered, you must also appoint a Corporate
Secretary, a Treasurer, and other officers.

You need to appoint the corporate officers within 15 days from the company’s establishment and you
must also notify SEC no later than five days from the appointment.
You, as the single shareholder, will be the sole Director as well as the President of the OPC. Additionally,
you will also need to appoint a Corporate Secretary who must be a Filippino citizen and a Treasurer who
must be a resident in the Philippines.

President Corporate Secretary Treasurer

Shareholder ✅

Director ✅

Citizen of the Philippines ✅

Resident in the Philippines ✅

If you are a resident in the Philippines, you can also appoint yourself as the Treasurer of the OPC.

However, in that case, a bond will be required for the self-appointed treasurer. The bond will be
calculated based on the authorized capital stock of the OPC.

For example:

Authorized capital stock Surety bond coverage

1 to 1,000,000 PHP 1,000,000 PHP

1,000,001 to 2,000,000 PHP 2,000,000 PHP

2,000,001 to 3,000,000 PHP 3,000,000 PHP

3,000,001 to 4,000,000 PHP 4,000,000 PHP

4,000,001 to 5,000 000 PHP 5,000,000 PHP

5,000,001 and above Surety bond coverage is equal to the authorized capital stock of the OPC

The bond is subject to renewal every two years, and it is a continuous recruitment for as long as the
single stockholder is the self-appointed Treasurer of the OPC. It can be canceled by appointing another
person as the Treasurer.

Compliance requirements for One Person Corporations

One Person Corporations, just as other legal entities in the Philippines, are subject to corporate
compliance requirements.
An OPC needs to submit:

 Audited financial statement

 Disclosure of self dealings

 Other reports the SEC may require

How to Register as an OPC

The process of incorporating an OPC is similar to that of registering a corporation. In a notice released by
the SEC days before they started accepting applications, it listed five main steps for OPC registration:

1. Verification and approval of company name

2. Submission of registration documents (i.e., cover sheet, articles of incorporation, written consents)

3. Payment of filing fees (Php 100 for name reservation, at least Php 2,000 for articles of incorporation
depending on authorized capital stock, at least Php 20 for legal research fee depending on the total filing
fee, and an additional Php 3,000 for foreigner applicants)

4. Submission of notarized documents and proofs of payment

5. Receipt of the certification of registration

Note that the SEC will only process applications for OPCs manually, which means that interested
entrepreneurs must go to the SEC head office in the Philippine International Convention Center to
complete the process. While the notice did not mention online processing, it said that the manual
process was only applicable for the time being.

Unique OPC Regulations

As OPCs have a relatively unique structure compared to traditional corporations, the Revised Corporate
Code listed provisions and exceptions that only apply to them.

For one, all one person corporations must add “OPC” to their corporate names. In the case of the first
OPC registration accepted, its full corporate name is “Smart Transportation and Solutions OPC.”

Entrepreneurs registering as OPCs are not required to submit corporate bylaws, or the official
regulations of a company. However, they still need to submit the company’s articles of incorporation.

As an OPC only has one incorporator, they will serve as both the director and president of the formalized
company. The law also states that OPCs must appoint a corporate secretary, treasurer, and other
necessary officers within 15 days from the date of incorporation. The business owner cannot take the
role of corporate secretary, but they may assume the role of treasurer provided that they submit a bond
to the SEC.

While OPCs will only have one board member, registrants must submit the written consents of a
nominee and an alternate nominee. These are the designated individuals who will take over the
business in the event of the founder’s death. They will handle company operations until an heir to the
founder is legally recognized.
Can we form a corporation with less than 5 incorporators?

YES!

SEC registers first corporation with less than 5 incorporators

(The Freeman) - August 10, 2019 - 12:00am

CEBU, Philippines — The Securities and Exchange Commission (SEC) has approved the registration of
the first corporation formed pursuant to the recently issued Guidelines on the Number and
Qualifications of Incorporators under the Revised Corporation Code.

On August 8, the Commission issued the certificate of incorporation of Markable Solutions Phils, Inc., the
first ordinary corporation with less than five incorporators under Republic Act No. 11232, or the Revised
Corporation Code of the Philippines.

Markable Solutions was incorporated by American nationals Reshma Sinha Nigam (founder) and Anil
Kumar Nigam, and Indian national Radhika Melethil Vivekanandan for the primary purpose of providing
general business process outsourcing services and information products and services.

"When I was looking to expand, I wanted to move to a country that would welcome foreigners, where
English would be widely spoken and the workforce would be educated, motivated, and quality
conscious,” Markable Solutions President Reshma Nigam noted.

“The Philippines met my criteria but what surprised me was how easy it was to do business here. The
entire process from filing the application to receiving the certification was completed within seven days.
We cannot thank the SEC, CSI, and our lawyers, PJS Law, enough for the pleasant surprise.”

Citing the Revised Corporation Code, Ms. Nigam added: “I think this new law will see a spurt of new
foreign investments in the country which will be excellent for the Philippine economy. I cannot wait to
have other foreign companies enjoy the same experiences I had in doing business here.”

Batas Pambansa Blg. 68, or the Corporation Code of the Philippines, previously required “any number of
natural persons not less than five but not more than fifteen (15)” to come together and form a
corporation.

Under Section 10 of the Revised Corporation Code of the Philippines, “any person, partnership,
association or corporation, singly or jointly with others but not more than fifteen (15) in number, may
organize a corporation for any lawful purpose or purposes.”

On July 31, the Commission issued Memorandum Circular No. 16, Series of 2019, to provide the
Guidelines on the Number and Qualifications of Incorporators under the Revised Corporation Code. The
circular took effect upon its publication on August 1.

“The Guidelines strengthens the Revised Corporation Code’s provisions aimed at improving the ease of
doing business and thereby encouraging entrepreneurship and investment in the country,” SEC
Chairperson Emilio B. Aquino said.

“Among others, the Guidelines allows for the creation of ordinary corporations by only two
incorporators, which may now be composed of partnerships, corporations or associations aside from
natural persons.”
Under the Guidelines, two or more persons, but not more than 15, may form a corporation. The
Commission earlier issued guidelines on the establishment of a One Person Corporation, which is
considered as a special corporation.

The incorporators may be composed of any combination of natural persons, SEC-registered

partnerships, SEC-registered domestic corporations or associations in good standing as well as foreign
corporations.

Partnerships, corporations or associations, however, will have to appoint natural persons who shall sign
the articles of incorporation of the corporation being formed.

An individual who signs the articles of incorporation on behalf of an incorporator, which is not a natural
person, may not be named as a director or trustee in the articles of incorporation, unless he/she is also
an owner of at least one share of stock or a member of the corporation being formed.

The inclusion of foreign nationals in the articles of incorporation shall be subject to the applicable
constitutional, statutory, and regulatory restrictions, as well as conditions, with respect to foreign
participation in certain investment areas or activities.

Meanwhile, banks, banking and quasi-banking institutions, preneed, insurance and trust companies,
non-stock savings and loan associations, pawnshops, and other financial intermediaries will have to
secure favorable recommendations from the appropriate government agency before they could
incorporate.

Applications for registration in accordance with the new provisions of the Revised Corporation Code
shall be processed manually by the Commission’s Company Registration and Monitoring Department
and Extension Offices until further notice.

The Guidelines on the Number and Qualifications of Incorporators is available on the SEC website.