A One Person Corporation (OPC) is a cross between a sole proprietorship and a corporation. One person corporations are also domestic corporations but not regular corporations because they feature only one stockholder that could be a natural person, trust, or estate. One of the most significant distinctions between an OPC from a regular domestic corporation is that an OPC only needs one stockholder who is also considered the president and the director of the company, unlike in a traditional corporation where two or more incorporators and directors as well as corporate officers are required.
Advantages of OPC from Sole Proprietorship in the Philippines
- An OPC has perpetual existence despite bankruptcy, transfer of shares, etc.
- The single owner’s liability only extends to the assets they own.
- The sole shareholder may be a foreign national unless the industry involved is included in the Foreign Investment Negative List.
- Typically, a One Person Corporation does not require a minimum capital unless specified by law.
- An OPC does not require paying any capital stock at the time of incorporation unless specified by law.
- Some corporations may restructure as an OPC if a single stockholder acquires all the company shares.
Disadvantages of OPC from Sole Proprietorship in the Philippines
- An OPC must appoint a company secretary, a treasurer, and other officers within 15 days of establishment.
- Generally, a paid-up share capital of US$200,000 for a domestic market enterprise must be deposited to a local Philippine bank before OPC incorporation is completed.
- Corporations have an income tax rate of thirty percent (30%). In comparison, sole proprietorships only have an eight percent income tax rate (8%). The good thing is that despite a more significant income tax rate, corporations still enjoy more tax benefits than sole proprietorship firms.
- An OPC cannot be incorporated if the industry it belongs to is included in the Foreign Investments Negative List.
Who May Form a One Person Corporation
- Natural Person of Legal Age
*The trust does not refer to a trust entity, but to the subject being managed by a trustee.
Who Are Not Permitted to Form a One Person Corporation
- Natural Person Licensed to Exercise a Profession**
- Banks, Non-Bank Financial Institutions, and Quasi-Banks
- Pre-Need, Trust, and Insurance Companies
- Public and Publicly-Listed Companies
- Non-Chartered Government-Owned and Controlled Corporations (GOCC)
**If the purpose of setting up the OPC is to exercise their profession.
General Requirements for starting a One Person Corporation in the Philippines:
- Articles of Incorporation (Natural Person, Trust, or Estate)
- Letter of Consent from the Nominee and Alternate Nominee
- Cover Letter
- Other requirements based on certain conditions:
- Foreign Investments Act (FIA) Application Form for foreign natural individuals
- Proof of Authority to Act on Behalf of the Trust or Estate for trusts and estates incorporating as a One Person Corporation
- Affidavit of Undertaking to Change Company Name if not incorporated in the Articles of Incorporation
- Tax Identification Number (TIN) for Filipino stockholders
- Tax Identification Number (TIN) or Passport Number for Foreign single stockholder
Procedures for registering a One Person Corporation in the Philippines:
- Prepare documentary requirements for submission to the Securities and Exchange Commission (SEC).
- Submit documentary requirements for processing and evaluation.
- Pay the required fees.
- Present hard copies of signed and notarized documentary requirements and proof of payment for the fees.
- Obtain a Certificate of Registration from the Securities and Exchange Commission (SEC).
- In a span of 15 days after the issuance of the Certificate of Registration, the single stockholder should appoint a corporate secretary, a treasurer, and other officers. The stockholder should then notify the SEC within five days of the appointment.
Can I get help in starting my One Person Corporation in the Philippines?
Yes, you may ask for assistance in forming a one person corporation here in the country. Triple i Consulting has knowledge and skills about Philippine incorporation, corporate compliance, visas, and more – with over 12 years experience. Triple i Consulting is the first ISO 9001:2008 company in the Philippines to offer business registration services to its clients.
With a team of Philippine business strategy experts who can extend professional guidance for locals and foreign nationals looking to start their one person corporation in the Philippines, Triple i offers the following services and more:
Triple i Consulting provides more than the following services:
Start setting up a one person corporation by contacting us here, filling out the form below, calling us at +63 (02) 8540-9623, or emailing us at email@example.com to book an initial consultation with one of our business registration experts.
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