The Securities and Exchange Commission (SEC) has released a new Memorandum Circular No. 27 allowing corporations to be converted to One-Person Corporation (OPC) or to an Ordinary Stock Corporation (OSC), and vice versa.
The new memo gives flexibility to existing Domestic and One Person Corporations to restructure under the following scenarios:
1) If a natural person of legal age, a trust or an estate (single stockholder) has acquired all of the outstanding capital stocks of an OSC, it may then apply to be converted to a One Person Corporation (NOTE: such conversion is optional)
2) If the shares in an existing OPC are acquired by more than one (1) stockholder, the entity must apply for its conversion to Ordinary Stock Corporation. (NOTE: such conversion is deemed mandatory unless when winding up and dissolution is appropriate)
Either way, the conversions will mean filing several documentations with the SEC, one of which is the preparation and submission of an Amended Articles of Incorporation to effect the changes.
Why the need for such conversion?
This new memorandum will enable existing entities to restructure without the need to dissolve the current company. Company dissolution in the Philippines can be costly and tedious which can take more than one year to be completed hence, this new process of conversion will really be a convenience for those companies who will need it.
Interested in how Triple i Consulting, Inc. can assist in the conversion of your existing corporations? Contact us! Give us a call at +63 (02) 8540-9623 or send us an inquiry at firstname.lastname@example.org for an initial consultation with one of our experts.