One-Person Corporation Registration in the Philippines

Starting a One-Person Corporation (OPC) in the Philippines? Our expert team offers insights into step-by-step compliance for securing and navigating a smooth procedure for one-person corporation registration in the Philippines.

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Starting an OPC in the Philippines

The Philippines government enacted a Revised Corporation Code (RCC), Republic Act no. 11232, in the year 2019, which provided clear provisions for a new legal entity, i.e., one-person corporation registration in the Philippines. A massive increase and growth in the market demand ultimately provide a way to assist small, micro, and medium-scale entrepreneurs in starting an OPC in the Philippines that caters to the management of the increased market demands and also ensures the ease of doing business under the Securities Exchange Commission (SEC) in the Philippines. 

What is an OPC?

An OPC, which stands for One-Person Company, is a domestic corporation that allows only 1 entrepreneur to establish a legal business entity comprising only 1 shareholder holding the status of a sole incorporator, director, and president responsible for running the operations of the corporation. The OPC does not need multiple dummy incorporators or a board of directors like earlier to complete the process of one-person corporation registration in the Philippines. The entrepreneurs willing to start an OPC in the Philippines must mandatorily adhere to the following features of the one-person corporation:

  1. The OPC has a separate personality from its shareholders;
  2. The liability of the one-person corporation is limited up to the extent of shareholders’ shares and contributions in the corporation;
  3. The corporation does not dissolve even after the death of the shareholder as the revised Corporation Code provides the provision for perpetual succession of the one-person corporation;
  4. The shares of an OPC can either be sold or transferred to another single shareholder without affecting the existence of the corporation;
  5. The Revised Corporation Code elaborated on the provision for no minimum capital requirement during starting an OPC in the Philippines;
  6. The one-person corporation is taxed on a fixed corporate income tax rate of 25-30%, similar to a corporation;
  7. No restriction on attracting foreign investment opportunities as it allows 100% foreign ownership for starting an OPC in the Philippines;
  8. There stands a need to appoint a nominee or alternate nominee to carry forward the management of the OPC in case of death, insolvency, or incapacity of the shareholders;
  9. The features for the registration of the sole-proprietorship are observed differently from that of the one-person corporation registration in the Philippines, as the features of an OPC being a separate legal entity having its fixed income tax rate and judicial personality that exists even after the death of the owner are absent during the registration of the sole-proprietorship in the Philippines;
  10. Easy to expand the business of an OPC by converting it into a regular corporation

A list of certain businesses that the entrepreneurs are free to register as one-person corporations in the Philippines includes sari-sari stores, rice retailing businesses, vape shops, and Small-scale ready-to-wear clothing stores.

Benefits of starting an OPC in the Philippines

Several entrepreneurs enjoy benefits from the one-person corporation registration in the Philippines, which is considered to hold the status of the fastest-growing economy among the ASEAN countries in the year 2022 and hence providing well-developed infrastructural facilities, commendable schemes for attracting foreign investors, and a vibrant entrepreneurial culture for the investors offering a simplified procedure for starting an OPC in the Philippines. The benefits of one-person corporation registration in the Philippines include:

  1. Exists even after the death of the shareholder;
  2. Limited liability for the owners of the corporation;
  3. No minimum capital requirement unless prescribed by law;
  4. Opens the door to allow 100% foreign investors;
  5. Sole ownership and control over the business activities and relevant decisions;
  6. Allows restructuring of the corporation into a regular corporation;
  7. Allows restructuring of an existing corporation into an OPC;
  8. It involves less risk in comparison with the sole proprietorship;
  9. Attracts a simplified procedure for one-person corporation registration in the Philippines;
  10. Excellent opportunity for small and medium-scale enterprises to start their business in the Philippines;
  11. Offers low tax rates to sole proprietors opting to start an OPC in the Philippines.

Eligibility for starting an OPC in the Philippines

According to the provisions of the Revised Corporation Code, the shareholder appointed to start an OPC must have the following qualifications for establishing the eligibility criteria for one-person corporation registration in the Philippines, which are discussed below:

  1. a trust managed by the trustee;
  2. a natural person of legal age;
  3. An estate;
  4. A citizen or resident of the Philippines;
  5. A foreign investor who is registered as a natural person (with certain limitations provided under the Foreign Investment Negative List, i.e., FINL);
  6. An existing domestic ordinary stock corporation (by conversion);

The list of unauthorized entities that are not eligible for one-person corporation registration in the Philippines includes the following:

  1. Natural persons acting in the capacity of registered professionals;
  2. Public-listed companies;
  3. Banks, quasi-banks, financial institutions, and other entities;
  4. Pre-need, insurance companies, and trust entities;
  5. The non-chartered government-owned and controlled corporations (GOCCs).

Procedural Guide for Starting an OPC in the Philippines

The guide provides a clear vision for national and foreign entrepreneurs to provide genuine assistance while following the procedure for one-person corporation registration in the Philippines. The entire procedure for starting an OPC in the Philippines can be carried out by the entrepreneurs themselves or are free to avail of our business consulting services for simplifying and completing the exhaustive process of one-person corporation registration in the Philippines.

The entrepreneurs are authorized to mandatorily file the application with the Securities and Exchange Commission to smoothly carry out the procedure of the one-person corporation registration in the Philippines.

Step 1: Register the proposed name for the corporation

The first step asks the entrepreneurs to shortlist and check the availability of at least 3 proposed names for the one-person corporation registration in the Philippines. The name availability check can be directly done through the official website of the Securities Exchange Commission of the Philippines. The proposed name of the corporation must contain the suffix 'OPC', which is relevant for indicating the separation of entities. Also, the entrepreneurs must check the domain availability for the corporation and file a letter of appeal in case the proposed name for the corporation is rejected by the authorities. 

Step 2: Gather and submit relevant documents

The next step allows the entrepreneurs to prepare and compile the required documents to support the one-person corporation registration in the Philippines. The list of documents includes the following:

Articles of Incorporation

It is mandatory to file the Articles of Association, commonly termed the AOI, with the following information regarding the structure and working pattern of the business. The information that must be recorded in the AOI is provided below:

  1. The complete details, including name, address, and nationality of the shareholder, stockholder, or incorporator;
  2. The primary purpose of the corporation;
  3. The term for the existence of the corporation;
  4. The details containing the official address;
  5. The complete details of the appointed nominee and alternate nominee;
  6. The complete bifurcation between the authorized, subscribed, and paid-up capital invested in the corporation;
  7. The accounting year-end preference;
  8. Any other relevant and necessary information consistent with the law.

Lastly, the Articles of Incorporation must attested and acknowledged by the incorporator along with the details of the registered TIN for the one-person corporation registration in the Philippines.

Written Consent or Acceptance Letter

The next document necessarily required for starting an OPC in the Philippines is the written consent from the nominee and the alternate nominee for agreeing or accepting to replace and stand in the capacity of the stockholder upon its death or incapacity.

Other Documents

The following list of other documents must be provided by the different categories of entrepreneurs depending upon the arising requirements (varies from case to case).

  1. The document providing proof of authority to act on behalf of the trust or estate for trusts and estates;
  2. The facsimile of the Foreign Investment Act application form (FIA) for foreign natural persons;
  3. The facsimile of the Tax Identification Number for the Filipino single stockholder;
  4. The facsimile of the Tax Identification Number or the Passport Number for the sole foreign stockholder;
  5. The facsimile of the Affidavit or Undertaking for changing the name of the corporation (if the provision for name change is not provided in the AOI of the corporation);
  6. Cover Sheet;
  7. Capitalization details through a list containing the minimum no. of shares, the ‘per value’ of the shares, the details of the subscribed, and the paid-up amount.

Step 3: Payment of the Fees

The next step after the submission of the application requires the entrepreneurs to pay the cost for one-person corporation registration in the Philippines through the payment assessment form (PAF). The major costs for starting an OPC in the Philippines include the following breakups:

  1. The cost of reserving the general and trade name of the corporation attracts the payment of fees amounting to 100.0 Philippine pesos;
  2. The cost of filing the Articles of Incorporation is 0.5-1% of the value of the authorized capital stock (should not be less than 2000.0 Philippine pesos);
  3. A legal research fee of 1% must be charged (should not be less than 20.00 Philippine pesos);
  4. The fee for filing the Foreign Investment Act application form (FIA) must be 3000.0 Philippine pesos (in case the sole stockholder is a foreigner);
  5. The payment of a fee of 30.00 Philippine pesos for the documentary stamp;

The above list of fees doesn’t contain the paralegal or legal charges for simplifying the services of document preparation and filing for the one-person corporation registration in the Philippines.

Step 4: Submission to the SEC Office

The next step requires ensuring that the entrepreneurs have submitted the documents along with the 3 sets of hard and notarized documents and proof of payment for following both the pre and post-processing through either the official website of the Securities Exchange Commission (i.e., Electronic simplified processing of Application for registration of the company- eSPARC) or the manual filing of the application form at the head office of the Securities Exchange Commission at the Philippines International Convention Centre. The status of the application form can be traced with the help of the application reference number, and also the same will be notified via email within 3 days of filing the application form.

Step 5: Receive the Certificate of Registration

The last step required for the one-person corporation registration in the Philippines ensures the evaluation of the online or offline registration by the authorities registered in the SEC. Once the procedure of evaluation is complete and approved by the SEC, the Certificate of Registration i.e., COR is granted to the small and medium-scale entrepreneurs applying to start an OPC in the Philippines.

Step 6: Post-Registration Formalities

The next step must be applied only after the completion of the process and receiving the Certificate of Registration for starting an OPC in the Philippines. Certain other post-registration requirements that must be ensured by the entrepreneurs are discussed below:

Appointment of the Corporate Officer for the OPC

The sole stockholders are authorized to appoint within 15 days of the issuance of the certificate of registration and notify the SEC within 5 days of the information regarding the appointment of the following authorities:

  1. Treasurer of the corporation;
  2. Company secretary of the corporation;
  3. The president or executor of the corporation, i.e., a shareholder;
  4. Other corporate officers are citizens or residents of the Philippines.

If the stockholder or the entrepreneur is himself or herself a resident, then they are free to appoint themselves as the treasurer of the one-person corporation along with a bond to calculate the authorized capital stock of the corporation.

Apply for Business Permits and other necessary government registrations

After receiving the certificate of registration, the entrepreneurs are free to apply for the relevant permits and business licenses required to carry out business operations freely and enjoy the one-person corporation registration in the Philippines.

  1. Barangay Clearance License;
  2. Mayor’s Permit;
  3. Business Occupancy Permit;
  4. Registration with the Department of Labour and Employment (DOLE);
  5. Registration with the Bureau of Customs;
  6. Food and Drugs Administration registration certificate;
  7. Registration with the Social Security System of the Philippines (SSS);
  8. Registration with the Health Insurance System (PhilHealth);
  9. Get the Home Development Mutual Fund registered to enjoy the employees’ benefits (Pag-IBIG Fund).

Issuance of Tax ID for the OPC

The next legal requirement after getting the relevant business permit is to get the registration certificate from the Bureau of Internal Revenue (BIR), incorporating the tax identification number of the corporation. The tax ID of the OPC is required to file corporate tax returns for the tax year.

Open a Corporate Bank Account for the OPC

The appointed treasurer of the one-person corporation is authorized to open a corporate bank account, i.e., Treasurer-in-trust for the OPC (TIFT account), which can be converted into a regular checking or savings account upon the completion of the procedure for one-person corporation registration in the Philippines. The need for opening the corporate bank account lies below:

  1. To ensure smooth paid-up capitalization,
  2. To eliminate the financial risks;
  3. To smoothly handle the business accounting, etc.

Other corporate Compliance

Section 129 of the Revised Corporation Code (RCC) lays provisions for compliance with other corporate requirements to be done after the completion of the procedure for the one-person registration in the Philippines. The entrepreneurs are eligible for:

  1. Filing the annual returns of the corporation;
  2. Filing the audited financial statement within 120 days from the end of the tax year;
  3. Preparing other reports required by the SEC;
  4. Disclosure of self-dealings and related party transactions of the OPC;

What services Enterslice offer?

We at Enterslice offer entrepreneurs sustainable client solutions for starting an OPC in the Philippines. We hold a vast and innovative team at our 20+ international offices catering and assisting entrepreneurs with business solutions required during global company formation, in securing the audit and assurance, financial planning, filing the tax returns, offering legal and advisory services, etc.

Here, the strategy that we incorporate during the one-person corporation registration in the Philippines applies to the following:

  1. Assists in opening the corporate bank account for the corporation;
  2. Assists in simplifying the procedure for starting an OPC in the Philippines;
  3. Simplifies the procedure for filing tax returns of the corporation;
  4. Provides professional assistance;
  5. Assists in preparing the business strategy;
  6. Assists in acquiring local government and business permits;
  7. Assists in maintaining yearly compliance, etc.

Choose Enterslice for smooth completion of the one-person corporation registration in the Philippines because of the ultimate experience that we gain through the registration of approx. 100+ local and foreign companies incorporated throughout the world.

Frequently Asked Questions

No, a natural person possessing a professional license is not authorized to carry out his/her profession by starting an OPC in the Philippines.

Yes, foreigners are freely authorized to register as one-person corporations in the Philippines in consonance with the nation's statutory requirements.

Yes, sole individuals i.e., one natural person of legal age, trust, or the estate are authorized to start and own an OPC in the Philippines.

The entire process for one-person corporation registration in the Philippines is acknowledged through a certificate of registration received due to the following steps providing the reservation of the name of the corporation, compilation and submission of the relevant documents and information, payment of the incorporation fees, and lastly, submission of the signed and notarized documents along with the proof of payment.

The difference between a sole proprietorship and a one-person corporation registered in the Philippines includes:

Basis of Difference

One-person Corporation

Sole Proprietorship

Where to register

Securities Exchange Commission

Department of Trade & Industry

Liability

Limited up to the extent of the contribution of the stakeholder

Owner directly liable for the liabilities of the business

Taxes

Taxed like a regular corporation, i.e., 20-25% corporate income tax rate.

Either taxed on the graduated income tax rates or at 8% of gross/ receipts.

Transfer of ownership

The shares can be sold or transferred to another sole stakeholder

The owners are not authorized to sell or transfer the ownership of the business since its registration documents are tied to its original owner

Succession after the death of the owner

Transferred to the nominee or alternate nominee appointed for the purpose

Transferred to the heirs of the owner

 

Cost of approx. 20,000.00 Philippines pesos is charged for the one-person corporation registration in the Philippines.

The timeline required for starting an OPC in the Philippines is approx. 2-3 weeks.

Limited liability for the owners, no minimum capital requirement, 100% foreign investors, less risk in comparison with the sole proprietorship, and a simplified procedure for a one-person corporation registration are some of the several advantages of starting an OPC in the Philippines.

No, starting an OPC in the Philippines does not require minimum authorized capital stock unless prescribed by the law governing the regulation of the one-person corporation registration in the Philippines.

The corporate tax rate for a one-person corporation registered in the Philippines is fixed at approx. 25- 30%.

The term of existence of a one-person corporation registered in the Philippines shall be perpetual, i.e., it shall exist even after the death of the stakeholder.

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