Like many other countries, the Philippines has a legal framework that allows for establishing special corporations when registering a business. These corporations are subject to specific regulations and requirements in the Philippines’ Revised Corporation Code. In this article, we will delve into setting up two distinct types of special corporations under the Philippine law: Educational Corporations and Religious Corporations. Additionally, we will discuss the concept of One Person Corporations (OPCs) as introduced in the revised code.

Educational Corporations

Incorporation (SEC. 105)

Both special laws and the general provisions of the Revised Corporation Code govern educational corporations in the Philippines. To establish an educational corporation, you must adhere to these specific regulations.

Board of Trustees (SEC. 106)

The board of trustees for educational institutions organized as nonstock corporations must consist of not less than five (5) and not more than fifteen (15) members. The number of trustees should be in multiples of five (5).

Upon organization, the trustees must classify themselves so that the term of office of one-fifth (1/5) of their number expires yearly. Subsequently, elected trustees will fill vacancies occurring before the expiration of a particular term, serving only for the unexpired period. Trustees elected to fill vacancies caused by the expiration of a term shall hold office for five (5) years. The powers and authority of trustees are defined in the bylaws.

For institutions organized as stock corporations, the number and term of directors are governed by the provisions applicable to stock corporations.

Setting Up an Educational Organization

To establish an educational organization, follow these steps:

1. Choose Your Legal Structure: Determine whether you want to establish a nonstock or stock educational corporation based on your specific needs.
2. Board of Trustees/Directors: Appoint a board of trustees or directors as required by the chosen legal structure. Ensure that the number and term comply with the regulations.
3. Draft Articles of Incorporation: Prepare articles of incorporation specifying the educational institution’s purpose, rules, and regulations. Include information about the initial board of trustees or directors.
4. File with the Commission: Submit the articles of incorporation to the appropriate government authority, accompanied by the necessary documentation, and pay the required fees.
5. Define Your Bylaws: Develop bylaws that outline the powers and authority of the board of trustees or directors, among other organizational guidelines.
6. Begin Operations: Once approved, you can commence operations as an educational organization.

Religious Corporations

Classes of Religious Corporations (SEC. 107)

Religious corporations in the Philippines can be classified into two categories: corporations sole and religious societies. These entities are governed by the provisions outlined in Chapter II of the Revised Corporation Code.

Corporation Sole (SEC. 108)

A corporation sole is a legal entity formed to administer and manage the affairs, property, and temporalities of a religious denomination, sect, or church. It is established by the chief archbishop, bishop, priest, minister, rabbi, or other presiding elder of the respective religious entity.

Articles of Incorporation (SEC. 109)

To become a corporation sole, the religious leader must file articles of incorporation with the Commission. These articles must include essential information such as the religious denomination, consistency with religious rules, and the jurisdiction within the Philippines where the corporation’s sole principal office is to be located.

Acquisition and Alienation of Property (SEC. 111)

A corporation sole may purchase and hold real estate and personal property for religious, charitable, benevolent, or educational purposes. It may also receive bequests or gifts for these purposes. Procedures for selling or mortgaging property are outlined in the code, with provisions for court intervention when necessary.

Dissolution (SEC. 113)

A religious corporation sole can be dissolved voluntarily by submitting a verified declaration of dissolution to the Commission. This declaration must include the reason for dissolution and the authorization for dissolution by the religious denomination, sect, or church. Upon approval, the corporation sole ceases operations except for winding up affairs.

Setting Up a Religious Organization

To establish a religious organization in the Philippines:

1. Choose the Type of Religious Organization: Decide whether you want to create a corporation sole or a religious society.
2. Appoint the Religious Leader: If creating a corporation sole, designate the chief archbishop, bishop, priest, minister, rabbi, or presiding elder representing the religious entity.
3. Draft Articles of Incorporation: Prepare articles of incorporation outlining the necessary information, including the religious entity’s representation and the jurisdiction of the principal office.
4. Submit the Articles: File the articles of incorporation with the Commission along with the required documentation.
5. Begin Operations: Once the Commission approves the establishment, you can begin operating your religious organization.

One Person Corporations (OPCs)

Applicability of Provisions (SEC. 115)

One Person Corporations (OPCs) are a unique feature introduced by the Revised Corporation Code. OPCs are primarily designed for single stockholders and are subject to specific regulations.

Formation of a One Person Corporation (SEC. 116)

A One Person Corporation is a corporation with a single stockholder. However, only a natural person, trust, or an estate may form an OPC. Certain entities, such as banks, quasi-banks, pre-need, trust, insurance, public and publicly-listed companies, and non-chartered government-owned and -controlled corporations, are not eligible to become OPCs.

Minimum Capital Stock (SEC. 117)

OPCs are not required to have a minimum authorized capital stock unless specified by special law.

Articles of Incorporation (SEC. 118)

An OPC must file articles of incorporation, including specific information related to the single stockholder, trustee, or administrator in the case of trusts or estates. It should also specify the nominee and alternate nominee.

Bylaws (SEC. 119)

Unlike traditional corporations, OPCs are not required to submit and file corporate bylaws.

Corporate Name (SEC. 120)

OPCs must include the letters “OPC” either below or at the end of their corporate name.

Corporate Officers (SEC. 121, 122)

The single stockholder serves as both the sole director and president of the OPC. Additionally, within fifteen (15) days of incorporation, the OPC should appoint a treasurer, corporate secretary, and other officers as deemed necessary. The corporate secretary cannot be a single stockholder.

Conclusion

The Revised Corporation Code of the Philippines provides a comprehensive framework for establishing special corporations, including educational and religious organizations, and the unique concept of One Person Corporations. By understanding and following the specific regulations and requirements outlined in the code, individuals and entities can navigate the legal landscape to establish these distinct types of corporations in the Philippines.