Salient Points of the

Revised Corporation Code

ATTY. ADRIAN B. CAMPILLA

 R.A. No. 11232 – Revised Corporation Code - RCC

“AN ACT PROVIDING FOR THE REVISED CORPORATION CODE OF THE

PHILIPPINES”

Took Effect on 23 February 2019 after finishing its publication in in two

(2) newspapers of general circulation.

March 10, 2024 Slide Number 2

 Removal of Minimum Number of
Incorporators

Removal of minimum number of incorporators

A single person or any group of persons not more

than 15 can organize a corporation (Sec. 10).

March 10, 2024 Slide Number 3

 The Removal gave rise to the One Person
Corporation (OPC)

Removal of minimum number of incorporators

A One-Person Corporation (OPC) is a corporation with a

single stockholder, who can only be a natural person (who
must be of legal age), trust or estate.

As an incorporator, the “trust” does not refer to a trust entity

but rather pertains to the subject being managed by a trustee.

March 10, 2024 Slide Number 4

 In a One Person Corporation, the sole
stockholder is not alone

First “ NO MAN IS AN ISLAND”

The single stockholder shall be the sole director

and president of the OPC. He can be the
Corporate Treasurer but not as the Corporate
Secretary.

March 10, 2024 Slide Number 5

 In a One Person Corporation, the sole
stockholder is not alone
In the event of his death or incapacity, the single stockholder
may be replaced by the designated nominee or by an
alternate nominee.

The single stockholder is required to designate a nominee

and an alternate nominee named in the Articles of
Incorporation who shall replace the single stockholder in the
event of the latter's death and/or incapacity. The written
consent of both the nominee and alternate nominee shall be
attached to the application for incorporation.

March 10, 2024 Slide Number 6

Can a Foreigner form a OPC?

Yes. A foreign natural person may establish an

OPC, subject to the applicable capital
requirement, the constitutional and statutory
restrictions on foreign equity in certain
investment areas or activities.

March 10, 2024 Slide Number 7

Who are not allowed to organized an OPC?

The following are not allowed to incorporate or organize as

OPCs:
– Banks, non-bank financial institutions, quasi-banks;
– Pre-need, trust, insurance companies;
– Public and publicly-listed companies;
– Non-chartered government-owned-and-controlled
corporations (GOCCs); and
– A natural person who is licensed to exercise a
profession, except as otherwise provided under special
laws.

March 10, 2024 Slide Number 8

Is a One Person Corporation required to file By-laws together
with the AOI?

No. Only the Articles of Incorporation (AOI) is

needed

March 10, 2024 Slide Number 9

 What are the contents of the AOI for an OPC?

• Primary purpose;
• Principal office address;
• Term of existence;
• Names and details of the single stockholder;
• Nominee and alternate nominee;
• The authorized, subscribed and paid-up capital;
and
• Such other matters consistent with law and which
may be deemed necessary and convenient.

March 10, 2024 Slide Number 10

Remember

The suffix “OPC” should be indicated by the

one-person corporation either below or at
the end of its corporate name.

March 10, 2024 Slide Number 11

 What is the Procedure of appointment of Officers by the
OPC?

– Within fifteen (15) days from the issuance of its

Certificate of Incorporation, the OPC shall
appoint a Treasurer, Corporate Secretary, and
other officers;
– Within five (5) days from appointment, the OPC
shall notify the Securities and Exchange
Commission (SEC) using the Appointment Form
as may be prescribed by the SEC.

March 10, 2024 Slide Number 12

Take Note

The single stockholder who assumes the

position of the Treasurer shall post a surety
bond to be computed based on the
authorized capital stock (ACS) of the OPC.
If another person other than the single
stockholder is appointed as treasurer, there is
no bond requirement.

March 10, 2024 Slide Number 13

 OPC Liabilities
If the sole stockholder cannot prove that the OPC’s property is
independent of the sole stockholder’s personal property, the sole
stockholder shall be jointly and severally liable for the OPC’s liabilities.
Otherwise, the doctrine of the need to pierce the corporate veil shall
continue to apply even to OPCs (Sec. 130).

An ordinary corporation can be converted into an OPC and vice versa

(Sec. 131 and 132).

March 10, 2024 Slide Number 14

Minimum Capital Requirement removed
for Stock Corporations and OPCs
The Old Code required that at least 25% of the authorized capital stock
must be subscribed, and at least 25% of the total subscription must be
paid by the stockholders, provided that the minimum paid-up capital shall
not be lower than Php5,000.00.

The New Code removed the aforementioned 25% subscription, payment

and minimum paid-up capital requirements. The New Code states that
“stock corporations shall not be required to have a minimum capital stock,
except as otherwise specifically provided by special law.” (Sec.10)

March 10, 2024 Slide Number 15

Perpetual Existence

A corporation can now be created with a perpetual existence

unless the articles provide otherwise. All existing
corporations (with fixed terms) shall automatically be
deemed to have perpetual existence unless a majority of its
stockholders inform the SEC of its intent to retain the fixed
term in its articles (Sec. 11).

March 10, 2024 Slide Number 16

Independent Director Requirement
Requiring the election of independent directors constituting at least 20% of the
board for corporations:

(i) covered by the Securities Regulation Code or those listed with any other
exchange or with Php50 Million assets, 200 or more stockholders each with
100 shares each;

(ii) banks, quasi-banks, NSSLA’s, pawnshops, money services, insurance and

other financial intermediaries; and

(iii) those vested with public interest as determined by the SEC (Sec. 22).

March 10, 2024 Slide Number 17

Director and Compliance Requirements…

Compliance officer - Corporations vested with public interest

are now required to elect a compliance officer (Sec. 24)

Compensation of Directors/Trustees. The law also requires

the submission to the shareholders and SEC of an annual
report on the total compensation of each director or trustees.

March 10, 2024 Slide Number 18

Electronic Means and Keeping up..

Director vote via remote methods – Directors can vote at board meetings
via remote communication like teleconferencing videoconferencing, etc.
(Sec. 52).

Following the concept of allowing board meetings by way of

videoconferencing, teleconferencing, or other alternative modes of
communication which have been made explicit under the New Code, the
New Code took a step further by allowing stockholders or members to
exercise their right to vote through remote communication or in absentia
when authorized under the by-laws, subject to the rules and regulations to
be issued by the SEC.

March 10, 2024 Slide Number 19

Emergency Board

In case of vacancies in the board resulting in a failure to reach

a quorum and there is “emergency action needed to prevent
grave, substantial and irreparable loss or damage to the
corporation”, the vacancy can be temporarily filled from
among the officers of the corporation by the unanimous vote
of the remaining directors. The action of the emergency
director shall only be valid for the emergency and the SEC
must be informed of the creation of the emergency board
within 3 days (Sec. 28).

March 10, 2024 Slide Number 20

Enforcement and Compliance

Increase in administrative fines – Violations of the Code are

now punishable with a fine ranging from Php5 Thousand up
to a maximum of Php2 Million (Sec. 158(a)).

Two (2) year compliance period - Existing corporations

affected by certain provisions of the New Code are given a
period of two (2) years from its effectivity within which to
comply with the requirements thereon. (Sec. 185)

March 10, 2024 Slide Number 21

Benefits and Reasons for the Amendment

The New Code aims to improve ease of doing business and modernize
procedures to improve and elevate the standards in the country’s corporate
setting in line with existing international best practices.

““It is focused on removing barriers hindering the entry of both small

and large enterprises into the Philippine market as it aims to foster smoother
transactions in pursuing business in the Philippines.”

Senator Franklin M. Drilon,

Principal Sponsor and Author of the RCC

March 10, 2024 Slide Number 22

Questions and Comments

March 10, 2024 Slide Number 23