SEC Registration of a One Person Corporation (OPC) in the Philippines
To register a One Person Corporation (OPC) with the Securities and Exchange Commission (SEC) in accordance with the Revised Corporation Code of the Philippines, here are the essentials and best practices:
Essentials for SEC Registration of an OPC
- Understanding the One Person Corporation (OPC): An OPC is a corporation with a single stockholder who can be a natural person, a trust, or an estate. The natural person must be of legal age, while the trustee or administrator needs to show proof of authority to act on behalf of the trust or estate.
- Who Can Form an OPC:
- Natural Persons: Filipino citizens of legal age can form an OPC. Foreign nationals may be permitted depending on industry sector and foreign ownership restrictions.
- Trusts and Estates: A trust or an estate can form an OPC if represented by a duly designated trustee, executor, administrator, or other legal representative.
- Restrictions: Banks, quasi-banks, pre-need, trust, insurance, public and publicly listed companies, and non-chartered government-owned and controlled corporations cannot incorporate as an OPC.
- Registration Requirements:
- Proposed Corporate Name: The corporate name must include the suffix “OPC” to identify it as a One Person Corporation.
- Articles of Incorporation (AOI): This document sets out basic corporate information such as the corporate name, principal office address, term of existence, purpose, and authorized capital stock. Bylaws are not required for OPCs.
- Written Consent of Nominee and Alternate Nominee: Designate a nominee and an alternate nominee in case of the stockholder’s incapacity or death. These nominees must signify their acceptance in writing.
- Proof of Authority: If the single stockholder is a trustee, administrator, executor, guardian, conservator, custodian, or other person exercising fiduciary duties, proof of authority to act on behalf of the trust or estate must be submitted during incorporation.
- Other Requirements: Foreign natural persons need to submit the Foreign Investments Act (FIA) application form. An affidavit of undertaking to change the company name may be required if the form is not incorporated in the articles of incorporation.
- Capitalization: There is no required minimum authorized capital stock and paid-up portion unless otherwise provided by applicable laws or regulations.
- Step-by-Step Registration Procedure:
- Name Verification: Apply for name verification with the SEC to ensure the proposed company name is available.
- Document Submission: Submit the required documents for pre-processing, including the cover sheet, articles of incorporation, written consent from the nominee and alternate nominee, and other applicable requirements.
- Fee Payment: Pay the necessary filing fees, which include name reservation, articles of incorporation, legal research fee, FIA application fee (if applicable), and documentary stamp tax.
- Hard Copy Submission: Submit hard copies of signed and notarized documents along with proof of payment to the SEC.
- Certificate of Incorporation: Once approved, the SEC releases the Certificate of Incorporation for the OPC.
Best Practices for OPC Registration
- Post-Registration Compliance:
- Appoint Officers: Within fifteen (15) days from the issuance of the certificate of incorporation, appoint a treasurer, corporate secretary, and other officers. The single stockholder cannot be appointed as corporate secretary.
- Treasurer’s Bond: If the single stockholder serves as the treasurer, a surety bond is required, computed based on the authorized capital stock of the OPC. This bond must be renewed every two years.
- Notify SEC: Inform the SEC of the appointments within five (5) days of their occurrence.
- Ongoing Compliance:
- Annual Financial Statements (AFS): Submit annual audited financial statements with a report on all explanations or comments by the president regarding any qualifications, reservations, or adverse remarks made by the auditor.
- Disclosure of Self-Dealings: Disclose all self-dealings and related-party transactions between the OPC and the single stockholder.
- General Information Sheet (GIS): Submit a simplified GIS annually to the SEC, disclosing basic corporate information, including details of the single stockholder, nominee, and alternate nominee.
- Corporate Governance:
- Written Resolutions: Document all decisions and actions in written resolutions, as all decisions must be in writing to have legal effect.
- Maintain Records: Keep updated minute books (or written decisions of the single stockholder) and stock & transfer books.
- Tax and Regulatory Duties:
- Tax Compliance: File and pay monthly, quarterly, and annual tax returns as required by the BIR. Remit withholding taxes for compensation if you have employees.
- Local Government Renewals: Renew business permits annually with the local government unit.
- Employee Registration: If you have employees, register them with the SSS, PhilHealth, and Pag-IBIG, and remit the required contributions monthly.
By following these guidelines, entrepreneurs can effectively register and maintain a One Person Corporation in the Philippines, ensuring compliance with the Revised Corporation Code and other regulatory requirements.