Anyone would love to have his or her own business. In this day and age, most people, especially young professionals, strive hard to be able to establish a business. Setting up your own business complicates things, as there are different types of business entities, and choosing the right entity is very crucial in starting your business.
A corporation is one of these entities that may be the perfect type for your business; however, establishing a corporation under the old corporation code is very complicated, as under the old law, at least five individuals are required to become incorporators of a corporation. Hence, an individual who intends to start his or her own business alone is left with the lone option to establish a sole proprietorship. This is no longer the case, because Republic Act 11232, otherwise known as the Revised Corporation Code of the Philippines, was approved last 20 February 2019.
One important amendment that the new law introduced is the One Person Corporation (OPC). This now allows individuals to establish a corporation with a sole incorporator.
Establishing an OPC allows the individual to limit the potential liabilities that may arise in operating a business entity in the Philippines to the investments made in the OPC, as compared to Sole Proprietorships, where liabilities shall extend to personal properties of the registered owner.
On the term of existence, an OPC is also allowed perpetual existence, depending on its nature. On the other hand, ordinary stock corporations are limited to 50 years of existence, which may be renewed by amending its incorporation documents before its expiry.
Who are needed?
Once the OPC has been incorporated, the following must be appointed within fifteen (15) days:
- Corporate Secretary; and
- other officers
In addition, during the application for registration, a nominee or alternate nominee shall be designated, who may be called to manage the affairs of the OPC if needed.
There is no minimum capital stock required for OPC’s, unless otherwise provided by special laws.
Furthermore, the following are not allowed to form One Person Corporation: Banks, non-bank financial institutions, quasi-banks, pre-need, trust, insurance, public and publicly listed companies, non-chartered government-owned, and controlled corporation. Foreign nationals may also put up an OPC, which is subject to the applicable capital requirements and constitutional and statutory restrictions.
Want to be the President of your own company? Call us at +632 8251-3404 / +632 8716-3392 / +63 906 415-1218 or email us at firstname.lastname@example.org.