Entities Allowed Under Philippines Law

legal work

Philippine law allows three different organizations allowed to be formed. Requirements for registration differ from one to the other. Foreigners are allowed to participate and own all 3 of these however, there are some restrictions of ownership which can be found in the foreign investment negative list. The capital requirement varies greatly when foreign ownership of more than 40% is involved unless in an export business. Setting up a corporation in the Philippines is the most common practice as it gives protection against liability of the owners.

Sole Proprietorship and Partnerships are not really great ways of protecting the owners, more allowing for a formal arrangement to be made for them to do business.

Triple i Consulting can help establish any of the following organizations, Contact Us for more details about entities in the Philippines.

Sole Proprietorship

Opening a Sole Proprietorship is a business structure owned by an individual who has full control/authority of its own and owns all the assets, personally owes and answers all liabilities or suffers all losses but enjoys all the profits to the exclusion of others. A Sole Proprietorship must apply for a Business Name and be registered with the Department of Trade and Industry- National Capital Region(DTI-NCR).


Registering Partnership Under the Civil Code of the Philippines , a partnership is treated as juridical person, having a separate legal personality from that of its members. Partnerships may either be general partnerships, where the partners have unlimited liability for the debts and obligation of the partnership, or limited partnerships, where one or more general partners have unlimited liability and the limited partners have liability only up to the amount of their capital contributions. It consists of two (2) or more partners. A partnership with more than three thousand pesos (P3,000.00) capital must register with Securities and Exchange Commission(SEC).


Incorporating in the Philippines is establishing a separate juridical person under the Corporation Code and regulated by the Securities and Exchange Commission with a personality separate and distinct from that of its stockholders. The liability of the shareholders of a corporation is limited to the amount of their share capital. It consists of at least five (5) to fifteen (15) incorporators each of whom must hold at least one share and must be registered with the Securities and Exchange Commission (SEC). Minimum paid up capital: five thousand pesos (P5,000.00). A corporation can either be stock or non-stock company regardless of nationality. Such company, if 60% Filipino-40% foreign-owned, is considered a Filipino corporation; If more than 40% foreign-owned, it is considered a domestic foreign-owned corporation.

Stock Corporation is a corporation with capital stock divided into shares and authorized to distribute to the holders of such shares dividends or allotments of the surplus profits on the basis of the shares held.

Non-stock Corporation is a corporation organized principally for public purposes such as charitable, educational, cultural or similar purposes and does not issue shares of stock to its members.

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