Registering a One Person Corporation

A One Person Corporation is a corporation with a single stockholder, and only a natural person, trust, or estate may form one. It files articles of incorporation and no bylaws, and must name a nominee and an alternate nominee who consent in writing. No minimum capital is required, and the corporate secretary must be someone other than the stockholder.

Two other people have to agree before you can register

Although one person owns the company, the single stockholder has to find two other people and obtain their written consent before the application is filed.

Section 124 of the Revised Corporation Code puts it this way:¹

The single stockholder shall designate a nominee and an alternate nominee who shall, in the event of the single stockholder’s death or incapacity, take the place of the single stockholder as director and shall manage the corporation’s affairs.

Their consent goes in with the application. The same section provides that “[t]he written consent of the nominee and alternate nominee shall be attached to the application for incorporation”, and that “[s]uch consent may be withdrawn in writing any time before the death or incapacity of the single stockholder.”² The Commission publishes a sample acceptance letter both may sign.³

A third role is filled once the certificate issues. Section 122 requires the corporation to appoint a treasurer, a corporate secretary, and any other officers, and provides that “[t]he single stockholder may not be appointed as the corporate secretary.”⁴ Section 121 provides that the single stockholder “shall be the sole director and president”.⁵ So the corporate secretary has to be somebody else, though that person may also serve as nominee or alternate nominee, which makes the minimum three people. The stockholder may also take the treasurer’s role, on the condition described below.

Who may form one, and who may not

Section 116 is short and carries three separate limits:⁶

A One Person Corporation is a corporation with a single stockholder: Provided, That only a natural person, trust, or an estate may form a One Person Corporation.

Banks and quasi-banks, preneed, trust, insurance, public and publicly-listed companies, and non-chartered government-owned and -controlled corporations may not incorporate as One Person Corporations: Provided, further, That a natural person who is licensed to exercise a profession may not organize as a One Person Corporation for the purpose of exercising such profession except as otherwise provided under special laws.

A company cannot form one: the incorporator must be “a natural person, trust, or an estate”. The guidelines add that a natural person incorporating one must be of legal age, and settle what “trust” means: “As an incorporator, the ‘trust’ as used by the law does not refer to a trust entity, but the subject being managed by a trustee.”⁷

Citizenship is not one of the limits. The guidelines provide that “[a] foreign natural person may put up an OPC, subject to the applicable capital requirement and constitutional and statutory restrictions on foreign participation in certain investment areas or activities.”⁸ What that person may lawfully do is a question for the Constitution and the investment laws.

Under the last proviso, a licensed professional may not organize one to exercise that profession unless a special law provides otherwise. Section 10 is not the same bar, since its purpose limitation attaches to a partnership or association organized to practice a profession, and not to a natural person.⁹

The Commission’s own list of exclusions is longer than the Code’s: the circular also bars non-bank financial institutions.¹⁰

What goes into the articles of incorporation

Section 118 sends the drafter to the general form and then adds two items of its own:¹¹

A One Person Corporation shall file articles of incorporation in accordance with the requirements under Section 14 of this Code. It shall likewise substantially contain the following:

(a) If the single stockholder is a trust or an estate, the name, nationality, and residence of the trustee, administrator, executor, guardian, conservator, custodian, or other person exercising fiduciary duties together with the proof of such authority to act on behalf of the trust or estate; and

(b) Name, nationality, residence of the nominee and alternate nominee, and the extent, coverage and limitation of the authority.

Section 14 sets out the statutory form. Section 13 before it sets what every corporation’s articles must carry, including the specific purpose and the principal office, “which must be within the Philippines”.¹²

Section 118(b) and Section 124 do not ask for the same particulars about the nominees. The first wants name, nationality, and residence. The second asks for “the names, residence addresses and contact details of the nominee and alternate nominee, as well as the extent and limitations of their authority in managing the affairs of the One Person Corporation.”¹³ An application should supply both sets of particulars. The Commission’s sample form carries no field for contact details.

The name carries a suffix, and there are no bylaws

Section 120 provides that a One Person Corporation “shall indicate the letters ‘OPC’ either below or at the end of its corporate name”, and the Commission’s sample form prints it into the title block and the first clause.¹⁴

There are no bylaws: Section 119 provides that the One Person Corporation “is not required to submit and file corporate bylaws”.¹⁵

Duration, and the treasurer clause in the sample form

On duration the two texts differ. Section 11 provides that a corporation shall have perpetual existence unless its articles of incorporation provides otherwise.¹⁶ The guidelines say that “[t]he term of existence of the OPC shall be perpetual”, with a trust or an estate co-terminous with the trust or the estate.¹⁷ The Commission’s own sample form offers a fixed-term alternative alongside the perpetual default.

The same form settles the treasurer question: its ninth clause offers three alternatives, one of them that the single stockholder acts as treasurer. It is signed by the incorporator and the treasurer and carries a notarial acknowledgment.¹⁸

There is no minimum capital

Section 117 provides that a One Person Corporation “shall not be required to have a minimum authorized capital stock except as otherwise provided by special law”, and the Commission’s guidelines add a second sentence the Code does not carry: “Further, unless otherwise required by applicable laws or regulations, no portion of the authorized capital is required to be paid-up at the time of incorporation.”¹⁹

The route the Commission published

After the signature page the Commission’s own file carries an application checklist:²⁰

1. Cover Sheet

2. Articles of Incorporation for One Person Corporation (Natural Person, Trust or Estate)

3. Written Consent from the Nominee and Alternate Nominee

4. Other Requirements, if applicable:

a. Proof of Authority to Act on Behalf of the Trust or Estate (for trusts and estates incorporating as OPC)

b. Foreign Investments Act (FIA) Application Form (for foreign natural person)

c. Affidavit of Undertaking to Change Company Name, in case not incorporated in the Articles of Incorporation

d. Tax Identification Number (TIN) for Filipino single stockholder

e. Tax Identification Number (TIN) or Passport Number for Foreign single stockholder

And the sequence:²¹

1. Initially, all name reservation requests shall be submitted manually at the SEC Head Office. CRMD personnel verifies the proposed company name; trade/business names by the applicant:

a. If denied, the applicant needs to submit letter of appeal for rejected names subject to the approval of the CRMD appeal officer.

2. Submit Articles of Incorporation with attached written consent of the nominee and alternate nominee and other requirements required for registration, for pre-processing.

3. Pay the Filing Fees (Registration Fee, LRF and Name Reservation Fee)

4. Submit hard copies of signed and notarized documents together with the proof of payment of filing fees at CRMD Receiving Unit

5. Receive the Approved Certification of Registration as One Person Corporation.

This is practical information about how the process ran in 2019, not legal advice. Confirm the current route and fees with the Commission before filing.

The filing fees, and the bond premium the list does not carry

The same checklist sets out the filing fees as the Commission published them in 2019. They are not current figures either, so ask the Commission what it charges now before budgeting.²²

a. Name Reservation – Php100.00 per company name and/or trade name

b. Articles of Incorporation -1/5 of 1% of the authorized capital stock but not less than Php2,000.00

c. Legal Research Fee (LRF) - 1% of the Registration/Filing Fee but not less than Twenty Pesos (Php20.00)

d. FIA Application Fee – Php3,000.00, if the single stockholder is a foreign national.

e. Documentary Stamp – Php30.00

Whatever the current figures, the structure is the same: the registration fee is a percentage of the authorized capital stock with a floor under it, the legal research fee is a percentage of that fee with its own floor, and the rest are flat. One fifth of one percent of a million pesos is two thousand pesos, so any authorized capital below a million pesos pays the floor.

The largest cost, where it applies, is not on the list. A single stockholder who also takes the treasurer’s role has to post a surety bond, and the premium a surety company charges for it is a commercial figure the Commission does not publish, so the registration cannot be priced without a quotation.

Registration is one step in setting up a business: tax registration and local permits are separate. The bond, the filings, and the records the Code requires after the certificate issues are the subject of the companion article on what a One Person Corporation must do once it is registered.

What to gather before speaking to a lawyer

This is practical information, not legal advice, and requirements change. The office may ask for more.

• The proposed corporate name and one or two alternatives, since a name can be refused as not distinguishable from one already registered
• What the company will do, in enough detail to draft a primary purpose
• The complete address of the principal office, which must be within the Philippines
• Your Tax Identification Number, and your passport if you are a foreign national
• The names, nationalities, residence addresses, and contact details of both nominees, and confirmation that they have agreed
• The authorized capital stock, how it is divided into shares, and how much is subscribed and paid
• Whether you intend to act as your own treasurer, which brings in the surety bond
• Where a trust or an estate is the single stockholder, the document proving the fiduciary’s authority

The decisions that come before the filing

This is company registration work, and the decisions that matter are made before the filing.

The application itself is a checklist. The decisions that are hard to undo come earlier: who will serve as nominee and alternate nominee, who will be the corporate secretary, whether the single stockholder will also be the treasurer, and what figure goes in for the authorized capital stock. Each is written into the articles or the consents attached to them, and amending them later costs more than settling them first.