A one-person corporation (OPC) is defined as a corporation with a single stockholder. They can either be a natural person of legal age, a trust, or an estate.
Here are the basic attributes of an OPC:
- A single stockholder has multiple roles. The single stockholder is both the single director and president of the OPC. They may also self-appoint as the treasurer, but they can’t be appointed as the corporate secretary.
- No minimum capital stock or corporate bylaws. An OPC is not required to have a minimum authorized capital stock unless mandated by a special law. It also doesn’t have to submit and file corporate bylaws with the Securities and Exchange Commission (SEC).
- An OPC is a separate legal entity. The single stockholder finances the OPC but does not share any liabilities with it. They only become liable for the OPC if they are unable to prove that their personal property is independent from that of the OPC.
Since an OPC is owned by a single stockholder, selling their shares ultimately means selling the whole corporation to another single stockholder. As a result, they will have to do two things: transfer their shares to the new owner and amend the corporation’s Articles of Incorporation.
What you need to prepare before selling your OPC
- Deed of Sale/Assignment
The single stockholder of the OPC is the “assignor” or “transferor” who will transfer the rights of all outstanding capital stocks of the corporation to the buyer, who is designated as the “assignee” or “transferee.” This Deed must be authorized by the corporate secretary of the OPC.
- Certificate Authorizing Registration (CAR)
For stocks not publicly traded on the Philippine Stock Exchange, the Bureau of International Revenue (BIR) requires a Certificate Authorizing Registration (CAR). This is a tax clearance document mandated by the National Internal Revenue Code that proves you have fully paid all taxes incurred in the sale of your shares.
Amendment of Articles of Incorporation (Articles V and VI)
All legal corporations have Articles of Incorporation filed with the SEC in accordance with the form provided in Section 14 of the Revised Corporation Code. For an OPC, the Articles of Incorporation should include the personal information of the single stockholder, the nominee, and alternate nominee.
When selling an OPC, the following must be filed with the SEC to amend its Articles of Incorporation with the new single stockholder’s information:
- Original and amended Articles of Incorporation, specifically with changes to Articles V (information of the new single stockholder or buyer) and VI (information of the new nominee and alternate nominee)
- A notarized Directors’ Certificate, signed by the original single stockholder and corporate secretary
- Secretary’s Certificate, confirming that there is no pending case of intra-corporate dispute
- Compliance Monitoring Division (CMD) Clearance
The SEC will issue a Certificate of Amendment of Articles of Incorporation once the following amendments have been approved.
You can learn more about one-person corporations and Philippine corporate law with our legal representatives at Duran & Duran-Schulze Law. Call us today at (+632) 478 5826 or send an email to email@example.com.