Forming One Person Corporations in the Philippines
A One Person Corporation (”OPC”) may be formed in the Philippines whereby the OPC is composed of a single stockholder who can only be a natural person, trust or estate. Its term of existence is perpetual but in case of a trust or estate, the term shall be co-terminous with the existence of the trust or estate. The suffix “OPC” must be indicated in the corporate name.
The following are not allowed to form an OPC:
2. Non-bank financial institutions
4. Pre-need, trust, insurance companies
5. Public and publicly listed companies
6. Non-chartered GOCCs
7. A natural person licensed to exercise a profession for purposes of exercising his profession
It must be noted that a foreign natural person can set up an OPC subject to applicable capital requirements and constitutional and statutory restrictions in certain investment areas. Please see the latest Philippine Investment Negative List to view the applicable capitalization.
Powers of a Sole Director in an OPC
The single stockholder shall be the sole director and president of the OPC. Within fifteen (15) days from issuance of the Certificate of Incorporation, the OPC shall appoint a Treasurer, Corporate Secretary and other officers. The SEC must be notified of such appointment within five (5) days therefrom.
The single stockholder cannot be appointed as Corporate Secretary, but he can be a Treasurer. If he is concurrently the Treasurer, he must post a bond based on the authorized capital stock of the OPC as shown in the table below. The bond is a continuing requirement so long as the single stockholder is the Treasurer. It is subject to renewal every two (2) years.
|Authorized Capital Stock (in Philippine Peso)||Surety Bond coverage|
|1.00 to 1,000,000.00||1,000,000.00|
|1,000,001.00 to 2,000,000.00||2,000,000.00|
|2,000,001.00 to 3,000,000.00||3,000,000.00|
|3,000,001.00 to 4,000,000.00||4,000,000.00|
|4,000,001.00 to 5,000,000.00||5,000,000.00|
|P5,000,001.00 and above = Amount of surety bond equal to the OPC’s ACS|
The single stockholder shall also designate his nominee and alternate nominee. If the single stockholder becomes incapacitated, the nominee can take over the management as director and president. Should the single stockholder die, the nominee temporarily takes over until the legal heirs of the former have legally determined who will take the place of the deceased.
Reportorial Requirements of a OPC
The OPC must comply with the reportorial requirements set forth below:
1. Annual audited financial statements must be submitted to the SEC within 120 days from the end of its fiscal year;
2. A report on the comments by the President on the adverse remarks made by the auditor in the financial statements
3. A disclosure of all self-dealing and related party transactions entered between the OPC and the single stockholder; and
4. Other reports as may be required by the SEC.
About Nicolas and De Vega Law Offices
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