Seeking to encourage more entrepreneurs to establish businesses in the country, the (SEC) has released a set of draft guidelines for the formation of a one-person corporation (OPC).
This is after President Rodrigo Duterte signed Republic Act No. 11232 which is also known as the Revised Corporation Code of the Philippines.
The Revised Corporation Code provides for the creation of an OPC by removing the minimum number of incorporators required to organize a corporation.
SEC Chairperson Emilio B. Aquino said that allowing the formation of an OPC is especially beneficial in an economy where micro, small, and medium enterprises comprise more than 99 percent of business establishments and generate around 63 percent of jobs.
Under the draft guidelines, only a natural person of legal age, a trust, or an estate may form an OPC.
It also states that a foreign natural person may put up an OPC. However, it is subject to the applicable constitutional and statutory restrictions on foreign participation in certain investment areas or activities.
An OPC may incorporate by submitting its Articles of Incorporation which states its primary purpose; principal office address; term of existence; names and details of the single stockholder, the nominee and alternate nominee; and the authorized, subscribed, and paid-up capital, among others.
Other provisions of the Revised Corporation Code on the OPC
The new code does not require an OPC to have a minimum capital stock and does not need to adopt corporate by-laws, either. An OPC needs only to prepare written resolutions, signed and dated by the single stockholder, instead of conducting meetings.
The sole stockholder may act as the president and sole director of the OPC. He or she may also act as the corporate treasurer, after submission of a bond to SEC and written undertaking of faithful administration, disbursement, and investment of funds. On the other hand, the single stockholder may not act as its corporate secretary.