On February 23, 2019, Republic Act No. 11232 – known as the Revised Corporation Code (RCC) – took effect. The 38-year-old Corporation Code was amended with the goal of improving the ease of doing business in the Philippines.
One of the more salient changes in the RCC is the removal of the minimum number of incorporators and the inclusion of One Person Corporations (OPC). And with the recent guidelines released by the Securities and Exchange Commission (SEC), an ordinary stock corporation (OSC) can now convert into a one-person corporation.
Prerequisite for becoming an OPC
Any OSC can become an OPC if a single stockholder has acquired all the outstanding capital stocks of an OSC. They should also have the corresponding Certificate Authorizing Registration (CAR) or tax clearance from the Bureau of Internal Revenue (BIR).
Submit the following documents
- Cover sheet
- Application for Conversion of an Ordinary Stock Corporation to a One Person Corporation (signed by the single stockholder and countersigned by the corporate secretary)
- Certified true copies of Deeds of Assignment or any legal document proving the transfer of all outstanding shares to the single stockholder
- CAR or tax clearance from the BIR
- Notarized Secretary’s Certificate of No Intra-Corporate Dispute
- Articles of Incorporation of an OPC, in accordance with the form prescribed under Section 14 and Section 118 of the RCC and the provisions indicated by the SEC Guidelines on the Establishment of a One Person Corporation
- Nominee and Alternate Nominee’s Letter of acceptance of appointment
- Name reservation
- Monitoring clearance from any relevant department of the SEC or from the Compliance Monitoring Division (CMD) of the Company Registration and Monitoring Department (CRMD)
- Self-appointed Treasurer’s Bond (if applicable)
- Undertaking to Change Corporate Name and Undertaking to Assume All Liabilities of the Ordinary Stock Corporation, duly executed under oath by the single stockholder (if not yet included in the Articles of Incorporation)
- Application Fees. The fees for Amendment of Articles of Incorporation, Name Reservation, and Legal Research will follow the rates determined by the SEC in theMC No. 03 s.2017 (Consolidated Schedule of Fees and Charges).
- Certificate of Filing of Amended Articles of Incorporation. The documents submitted will be processed as Amendment of the Articles of Incorporation. As such, this certificate will be issued by the SEC once the conversion to OPC has been approved.
- Full audit with the BIR. In compliance with the Reportorial Requirements under Sec. 129 in the RCC, the OPC must submit annual financial statements audited by an independent certified public accountant.
- New business permit. OSCs converting to OPCs are required to retire their current business permit and apply for a new one as an OPC with the Business Permits and Licensing Office (BPLO).
The new Revised Corporation Code can be confusing, making it difficult to take full advantage of the amendments without legal guidance. At Duran & Duran-Schulze Law, we are committed to helping your business navigate corporate law in the Philippines. Reach out to us by calling (+632) 478 5826 or by sending an email to [email protected].
Check out this video/s to know more: