Transfer Ownership of a Corporation in the Philippines: A Guide for 2025

November 7, 2025

Transferring ownership of a corporation is a significant corporate action that requires careful legal, financial, and procedural consideration. In the Philippines, the process involves the sale or assignment of shares or equity interests and must comply with requirements set by the Securities and Exchange Commission (SEC), the corporation’s by-laws, and applicable laws such as the Corporation Code.

Understanding Corporate Ownership Transfer

Ownership in a corporation is typically represented by shares of stock. Transferring ownership means the transfer of these shares from the current shareholders to the new owner(s). This legal transfer alters the composition of ownership, control, and responsibilities of the corporation.

A transfer can occur through:

Sale of Shares: The most common method, involving the sale of stock certificates or assignments.
Gift or Donation: Shares can be gifted, subject to donor taxation.
Inheritance: Ownership transfer through succession.
Exchange: As part of mergers, acquisitions, or restructuring.

Effective transfer of shares requires documentation, compliance with the corporation’s governing documents, and registration with regulatory bodies.

Legal Framework Governing Ownership Transfer

The transfer process is primarily governed by:

Revised Corporation Code of the Philippines (Republic Act No. 11232)
Securities Regulation Code (SRC)
Relevant SEC rules and regulations
The corporation’s Articles of Incorporation and By-Laws

The Corporation Code defines how shares can be transferred, the rights of shareholders including pre-emptive rights, and requirements for SEC approval of certain transactions. Compliance with these provisions ensures the validity of the transfer and protection of all parties involved.

Step 1: Review the Articles of Incorporation and By-Laws

Begin by reviewing your corporation’s Articles of Incorporation and By-Laws, since these may include:

Restrictions on share transfer: Such as pre-emptive rights, granting existing shareholders the first option to purchase shares.
Approval requirements: Transfers may require board or shareholder approval.
Procedures for sale or assignment: Specified steps to record the ownership transfer internally.

Non-compliance with these internal rules can lead to invalid transfers or shareholder disputes.

Step 2: Execute the Share Transfer Agreement

A written Share Transfer Agreement (STA) or stock sale contract must be prepared, detailing:

Parties involved (transferor and transferee)
Number and class of shares transferred
Purchase price or terms of transfer
Representations and warranties
Conditions precedent and subsequent, if any

The agreement must be duly signed and notarized to be recognized legally and for registration purposes.

Step 3: Update the Stock and Transfer Book

The corporation’s Stock and Transfer Book must be updated to reflect the change in ownership by recording:

Details of the transferor and transferee
Number and class of shares transferred
Effective date of transfer

The corporate secretary is responsible for maintaining this book, which serves as prima facie evidence of ownership.

Step 4: Issue New or Endorsed Stock Certificates

The original stock certificates issued to the transferor must be endorsed and delivered to the transferee.
Alternatively, new stock certificates may be issued in the name of the transferee following proper endorsement and surrender of previous certificates.
The issuance must match the record in the Stock and Transfer Book.

Proper documentation prevents future ownership disputes.

Step 5: Hold Approval Meetings, If Required

Certain share transfers may require:

Approval by a majority of the board of directors or shareholders.
For stock issuances or large transfers, an SEC approval may be necessary.
The corporation may provide for a pre-emptive rights offering to existing shareholders before sales to third parties.

Ensure all approvals are documented through board resolutions or shareholders’ minutes.

Step 6: Pay Applicable Taxes and Fees

Transfers are subject to government taxes:

Capital Gains Tax (CGT): 6% of the gross selling price or fair market value (whichever is higher) for shares of stock not traded on the stock exchange.
Documentary Stamp Tax (DST): PHP 1.50 for every PHP 200 of the par value or fractional part of shares.
Miscellaneous Fees and Transfer Taxes: May apply depending on local regulations.

Timely payment and proper filing with the Bureau of Internal Revenue (BIR) are essential to avoid penalties.

Step 7: File Required Documents with SEC (When Applicable)

Transfers involving:

Newly issued shares (capital increase)
Significant shareholder changes exceeding specific thresholds
Mergers, consolidations, or major restructurings

may require filing of amendments or disclosures with the SEC. Typical filings include:

Amended Articles of Incorporation
Disclosure statements of beneficial ownership
Secretary’s certificates and resolutions

Following SEC guidelines ensures regulatory compliance and transparency.

Practical Considerations and Best Practices

Conduct thorough Due Diligence: Verify the identity, financial standing, and legal capacity of the transferee.
Ensure Compliance with Pre-Emptive Rights: Neglect can lead to litigation.
Consult Legal and Tax Experts: To optimize tax implications and ensure transfer validity.
Maintain Transparent Communication: Keep shareholders informed to avoid conflicts.
Secure Notarization and Authentication: For enforceability and record-keeping.
Store All Documents Properly: To support future audits and ownership verification.

Common Challenges in Ownership Transfer and How to Mitigate Them

Conflicts with Shareholders: Clarify ownership structures upfront and obtain required consents.
Tax Compliance Issues: Engage tax advisors early to handle capital gains, documentary tax, and related obligations.
Documentation Gaps: Keep thorough written records; verbal agreements are insufficient.
Delays in SEC Processing: Submit complete and accurate forms along with the filing fees.
Disputes over Valuation: Agree on a fair price or engage independent auditors or appraisers.

Why Seek Professional Assistance?

Navigating a corporate ownership transfer without mistakes requires expertise in corporate law, taxation, and regulatory processes. Professional consultants like Triple i Consulting provide:

Templates and drafting of legally sound agreements
Assistance with internal approvals and board resolutions
Tax computation and timely filing of government paperwork
Coordination with the SEC and BIR to streamline registration and avoid audits
Strategic advice on structuring ownership for future business goals

Proper handling of transfer formalities safeguards your investment and enhances corporate governance.

Final Insights

Transferring ownership of a corporation in the Philippines is a complex, multi-step process that goes well beyond simply signing over shares. It requires regulatory compliance, careful documentation, tax remittance, and adherence to corporate governance to ensure the transfer is valid, enforceable, and beneficial to all parties. For business owners and investors, partnering with knowledgeable experts like Triple i Consulting ensures the transfer proceeds smoothly and supports your company’s long-term growth and stability.

Is Assistance Available?

Consult Triple i Consulting to handle document preparation, tax compliance, regulatory filings, and expert advisory for your share or ownership transfers in the Philippines: