Since the enactment of R.A. No. 11232, also known as the Revised Corporation Code of the Philippines, on February 23, 2019, the One-Person Corporation (OPC) emerged as a novel juridical entity. Distinguished by its structure, an OPC operates with a single stockholder, unlike traditional corporations that require at least five. When you register a business in the Philippines, this structure grants the sole stockholder significant protections against corporate liabilities, though such protections are not absolute and can be contested under certain circumstances. Given the relatively recent introduction of OPCs, their operational and legal frameworks are subject to ongoing interpretations and adjustments.

Legal Framework for Ownership Transfer

Transferring ownership of an OPC mirrors the process used in multi-shareholder corporations concerning the transfer of stocks. Under Section 115 of the Revised Corporation Code, except where specified, all provisions applicable to standard corporations also apply to OPCs by supplement. The critical steps include the execution of a Deed of Assignment or Transfer of Stock, which details the transferor’s relinquishment of shares to the transferee, including the number of shares and their agreed valuation.

Importance of Formal Ownership Transfer

Formalizing the transfer of ownership is crucial for several reasons:

• It empowers the transferee to exercise all shareholder rights.
• It notifies the corporation of the change in ownership, which is essential for associating rights and liabilities with the correct individual.
• It prevents fraudulent or fictitious transfers, safeguarding the integrity of share transactions.
• It facilitates the official recognition of the transferee as the stockholder through updated stock certificates.

These formalities are necessary for the transferee’s rights to be recognized, and they pose significant risks to their legal and operational standing within the corporation.

Fiscal Obligations

Ownership transfer incurs specific fiscal responsibilities:

• Capital Gains Tax: This tax is levied on the net gain from the stock transfer, calculated as the difference between the market value and the sale price, and is taxed at 15%. The tax must be filed and paid within 30 days post-transaction at the relevant Authorized Agent Bank.
• Documentary Stamp Tax (DST): Paid concurrently with the capital gains tax, DST amounts to Php1.50 per Php200 of the stock’s par value.

Procedural Steps for Transfer

1. Document Preparation: Prepare and notarize the Deed of Transfer and corresponding stock certificates.
2. Tax Settlement: Settle all applicable taxes with the Bureau of Internal Revenue (BIR) to obtain the Electronic Certificate Authorizing Registration (eCAR).
3. Corporate Notification: Submit the Deed of Transfer and eCAR to the OPC for official recording and issuance of new stock certificates.
4. Amended Articles of Incorporation (AOI): Prepare an amended AOI reflecting the new stockholder and submit it with the required documents to the Securities and Exchange Commission (SEC).

Documentation Requirements

Bureau of Internal Revenue (BIR):

• Tax Identification Number (TIN) for both seller and buyer.
• Notarized Deed of Transfer.
• Stock certificate photocopies.
• Proof of payment and acquisition cost.
• BIR Form 1707.

Securities and Exchange Commission (SEC):

• Amended Articles of Incorporation.
• Director’s and Secretary’s certificates.
• Company Registration and Monitoring Division (CRMD) Clearance.

Timeline for Transfer

The transfer process can extend from six months to a year, contingent on document accuracy and governmental efficiency. This timeframe may vary based on specific circumstances.

Is Assistance Available?

Yes, we can help. Transferring ownership of an OPC requires meticulous attention to legal, procedural, and fiscal details. Triple i Consulting is ready to assist you; contact us for an initial consultation to ensure a smooth transition to your OPC ownership. Contact us today through any of the following channels:

• Contact Us Here
• Fill out the form below
• Call us at: +63 (02) 8540-9623
• Send an email to: info@tripleiconsulting.com