SEC said is banking on the progressive provisions of the

Revised Corporation Code to unlock the potential of more

than a million inactive corporations and partnerships
registered with the SEC as of end-2018 along with the 2.5
million active business names registered with the Department
of Trade and Industry by March 2019.

“The concept of a one person corporation, along with the

other provisions of the Revised Corporation Code of the
Philippines, makes doing business in the country easier,” SEC
Chairperson Emilio B. Aquino said. “An OPC offers the agility
and complete dominion of a sole proprietorship and the
limited liability of a corporation. We encourage everyone to
take advantage of this provision to pursue their
entrepreneurial aspirations.”
(Office of the Commission Secretary S-309, 3F PICC
Secretariat Building Philippine International Convention
Center (PICC) Complex Pasay City 8-888-8141; 8-818-5478)

“The provision for a one person corporation should

encourage the formation of more businesses in the country
by making it easier for entrepreneurs to start a limited liability
company,”
“This 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.”
(SEC Chairperson Emilio B. Aquino)
All interested parties, market participants and the investing
public may submit their views, comments and inputs to SEC
Assistant Director Sampaguita R. Ladrido, through email at
srladrido@sec.gov.ph

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The Commission En Banc on April 25,2019 approved the
Guidelines on the Establishment of a One Person Corporation
(OPC) under Memorandum Circular No. 7, Series of 2019.
The same was published on May 1,2019 on two newspapers
of general circulation.
Last May 6, 2019, the Securities and Exchange Commission
(SEC) started accepting the registration of one-person
corporations (OPC) at its head office in Pasay City.
Registration For One Person Corporation Approved By SEC

The Securities and Exchange Commission (SEC) has

announced that they have received the registration of the
country’s first corporation with a single stockholder – the
Smart Transportation and Solutions.

Smart Transportation and Solutions., the country’s first ever

OPC was created primarily to establish, operate and manage
transportation services, including vehicle rental/ leasing, taxi
or shuttle services, and transportation of goods or persons for
any person.

Unique OPC Regulations

As OPCs have a relatively unique structure compared to
traditional corporations, the Revised Corporate Code listed
provisions and exceptions that only apply to them.

For one, all one person corporations must add “OPC” to their
corporate names.
In the case of the first OPC registration accepted, its full
corporate name is “Smart Transportation and Solutions OPC.”

Entrepreneurs registering as OPCs are not required to submit

corporate bylaws, or the official regulations of a company.
However, they still need to submit the company’s articles of
incorporation.
As an OPC only has one incorporator, they will serve as both
the director and president of the formalized company.

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The law also states that OPCs must appoint a corporate
secretary, treasurer, and other necessary officers within 15
days from the date of incorporation.
The business owner cannot take the role of corporate
secretary, but they may assume the role of treasurer provided
that they submit a bond to the SEC.

While OPCs will only have one board member, registrants

must submit the written consents of a nominee and an
alternate nominee.
These are the designated individuals who will take over the
business in the event of the founder’s death.
They will handle company operations until an heir to the
founder is legally recognized.

WHO
Under the Guidelines, a natural person, trust or estate
may form an OPC.
The incorporator, however, shall be a natural person of
legal age.
A foreign natural person may put up an OPC, subject to
the applicable constitutional and statutory restrictions on
foreign participation in certain investment areas or
activities.

The “trust” does not refer to a trust entity, but to the

subject being managed by a trustee.
If the single stockholder is a trustee, administrator,
executor, guardian, conservator, custodian or any other
person exercising fiduciary duties, proof of authority to
act on behalf of the trust or estate must be submitted at
the time of incorporation.

RESTRICTIONS/LIMITATIONS

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 The One Person Corporation, however, has its own
limitations as it not applicable to businesses under the
following industries:

Banks

Non-bank financial institutions

Quasi-banks, preneed

Trust and insurance companies

Public and publicly listed companies

Non-chartered government-owned and/or

controlled corporations(see Sec 183 2nd par RCC)

In addition, a natural person, who is licensed to exercise

a profession, may not organize as an OPC for the
purpose of exercising such profession unless provided
under special laws.
However, professionals, licensed or not, may not register
as an OPC if he or she is doing business to apply the said
profession “unless provided under special laws.”

For example, an accountant cannot put up an OPC to

practice accountancy.

If the applicant passes all the qualifications, he or she

may proceed with the registration process.

WHAT
Applications shall be filed manually with the SEC
Company Registration and Monitoring Department
(CRMD) at the ground floor of Secretariat Building in
Philippine International Convention Center in Pasay City.
Note that the SEC will only process applications for OPCs
manually, which means that interested entrepreneurs
must go to the SEC head office in the Philippine
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 International Convention Center to complete the
process.
While the notice did not mention online processing, it
said that the manual process was only applicable for the
time being.

Applications must include:(CAC-POA/ADB)

1. C-Cover sheet;
2. A-Articles of incorporation of the prospective OPC;
3. C-written Consent of the single stockholder’s nominee
and alternate nominee.

If applicable, an applicant must also submit:

POA-Proof Of Authority to act on behalf of a trust or
estate incorporating as an OPC, and
ADB-Application to Do Business under the Foreign
Investments Act (FIA) if the single stockholder is a foreign
natural person, among others.

HOW
How to apply for registration:(CPP-SOD COR)
Registering an OPC takes five steps:

Mnemonics-RPP-SOD-COR

1.R-Reservation, verification and approval of company

name
2.P-Pre-processing-Submission of registration
documents
3.P-Payment of filing fees
4.SOD-Submission of notarized documents and proofs of
payment
5.COR-Receipt of the certification of registration

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1. RESERVATION
To proceed with the application process, an applicant
will have to reserve a company name first.
The applicant is required to check if the company name
he or she wishes to register is still available at the SEC
office at the Philippine International Convention Center
in Pasay City.
Note that lines can be long so better be early.

MANUAL SUBMISSION
Initially, all requests for name reservation shall be
submitted manually at the Commission’s head
office in Pasay City.

VERIFICATION
The CRMD will verify the proposed company name
and trade/business names.
REJECTED NAME
If the unfortunate happens and the company name
is already taken, the applicant may file for an
appeal (which may take days).
The applicant may submit a letter of appeal for
rejected names, subject to approval of the CRMD
appeal officer.

CLEARED COMPANY NAME

Once the proposed company name is cleared,

2. P-PRE-PROCESSING
The applicant will submit the articles of incorporation
with the written consent of the nominee and alternate
nominee, and other applicable requirements for pre-
processing.(see efiles for AOI and other docs required).
Make sure all documents are notarized for processing.

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 To incorporate, an OPC only need to submit its Articles of
Incorporation setting forth 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.
An OPC is also not required to have minimum authorized
capital stock and, 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.
At the minimum, an OPC with an authorized capital
stock between P1 and P250,000 shall give a bond of
P250,000. The bond shall be equal to the authorized
capital stock when the latter breaches P5 million.
While the single stockholder will automatically be the
sole director and president, OPCs shall also appoint their
own treasurer, corporate secretary, and other officers
within 15 days from the issuance of its Certificate of
Incorporation and shall subsequently notify the SEC
within five days from appointment.
When the single stockholder assumes the position of the
treasurer, an OPC must post a surety bond, computed
based on its authorized capital stock and subject to
renewal every two years or as may be required, upon
review of its annual financial statements.

3. P-PAYMENT OF FEES
The applicant will proceed with the payment of the filing
fees, including the name reservation fee and a legal
research fee.
-Php 100 for name reservation,
-at least Php 2,000 for articles of incorporation
depending on authorized capital stock,

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 -at least Php 20 for legal research fee depending on
the total filing fee,
-and an additional Php 3,000 for foreigner
applicants)

While these fees may be minimal, a surety bond is

demanded from an applicant who wishes to also serve
as the OPC’s Treasurer.
Under section 10 of the OPC’s registration guidelines, the
surety bond will be computed based on the authorized
capital stock of the OPC. The value varies from a million
pesos to as much as P5 million. The bond is also subject
to renewal every two years, and is a “continuing
requirement” as long as the single stockholder is the
OPC’s treasurer.

4. SOD-SUBMISSION OF DOCS
Afterwards, hard copies of signed and notarized
documents together with the proof of payment of filing
fees shall be submitted to the CRMD Receiving Unit.
With all those fees paid, the applicant will then submit all
of his or her requirements to the SEC Company
Registration and Monitoring Department (CRMD).
Do note however, that the processing of the application
may take days as the entire process is still manually
done at the office of the SEC.

5. COR-CERTIFICATE OF REGISTRATION
The applicant will then receive a certificate of
registration as OPC.
Note that within 15 days from the issuance of the
Certificate of the Incorporation, the single stockholder
must appoint the firm’s treasurer, corporate secretary
and other officers, and he or she must notify the SEC
within five days after the appointment was made.

Page 8 of 11
 It may not be as tedious as registering as a partnership
or a full-fledged corporation, but it sure does still
demand a lot of work from entrepreneurs.

For more definitive guidance, applicants may check the

Guidelines, which include the form of the articles of
incorporation and a sample acceptance letter of the
nominee and alternate nominee, on the SEC website.
The list of requirements and the procedure are likewise
available online.

Conversion to an OPC
The draft guidelines on the conversion of an ordinary stock
corporation into an OPC operationalizes Section 131 of the
Revised Corporation Code, in particular.
Under the draft guidelines, only a domestic stock corporation
may be converted into an OPC and the single stockholder
may only apply for conversion after acquiring all outstanding
capital stock of the corporation.
The process is the same as amending Articles of
Incorporation to include the suffix OPC in the corporation’s
name and remove any suffix indicating an ordinary stock
corporation such as Corporation and Incorporation.
The corporation must also amend its Articles of Incorporation
to reduce the number of directors, name a nominee and
alternate nominee, and amend or remove provisions
distinctive to ordinary stock corporations, among others.
In addition, the Commission will require a Secretary’s
Certificate that the single stockholder acquired all
outstanding shares in the corporation and has decided to
convert the corporation to OPC, and for that purpose, has
decided to amend the articles of incorporation, repeal the
by-laws of the corporation and appoint a nominee and
alternate nominee for the OPC.

Page 9 of 11
The Secretary’s Certificate should also state that all taxes and
obligations in favor of the government has been settled, and
that the corporation or any of its stockholder, director, or
officer is not involved in any intra-corporate dispute.
Other requirements include Proof of Acquisition of all the
outstanding shares; Affidavit of Acceptance by the nominee
and alternate nominee, name reservation; Monitoring
Clearance of the ordinary stock corporation; and
Undertaking to Change Corporate Name by the single
stockholder.
The conversion of an ordinary stock corporation into an OPC
shall take effect upon approval by the Commission of the
Amended Articles of Incorporation through the issuance of a
Certificate of Filing of Conversion to One Person Corporation.
Upon approval of the conversion, the OPC will retain its SEC
Company Registration Number.
It shall also maintain legal responsibility for the ordinary stock
corporation’s outstanding liabilities and obligations as of the
date of approval of the conversion.
The draft Guidelines on the Establishment of a One Person
Corporation (OPC) and Guidelines on the Conversion of an
Ordinary Stock Corporation into One Person Corporation
(OPC) are available on the SEC website.

Differences Between OPCs and Sole Proprietorships

Before the approval of the Revised Corporation Code, most
entrepreneurs who were unable to find business partners to
meet the five-person requirement would opt to register their
business as a sole proprietorship.

Entrepreneurs registering as sole proprietors mean that they

become personally liable for all the risks that their businesses
take.

Page 10 of 11
In other words, the assets of the business and the
entrepreneur are treated as the same, making it risky for a
sole proprietor’s personal resources.

That risk doesn’t apply to an entrepreneur registering as an

OPC.

As an OPC, a business owner can claim limited liability, which

means that the company’s assets and the owner’s personal
assets are treated separately.

Should a business go under debt, creditors of sole proprietors

can demand for an entrepreneur’s personal assets, whereas
OPCs only stick to the assets invested in the company.

As OPCs are corporations, they have a fixed income tax rate

of 30%.
Sole proprietors are treated as individuals when taxed, which
means their applicable rates would vary depending on their
gross sales.

IN CONCLUSION
OPCs give entrepreneurs without partners another option for
formalizing their businesses. While it is not necessarily better
or worse than sole proprietorships, it’s a step forward in
making entrepreneurship accessible to more Filipinos and
foreigners who want to do business in the country.

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