Republic Act No. 11232, otherwise known as the Revised Corporation Code of the Philippines (RCC), introduced several innovations committed to improve the ease of doing business in the country. One of the most prominent inclusions in the RCC is the concept of a One-Person Corporation (OPC), or a corporation with a single stockholder. This Primer outlines the basic information in establishing an OPC.
- What is a One-Person Corporation?
A One-Person Corporation (OPC) is a corporation with a single stockholder, who can only be a natural person (who must be of legal age), trust or estate. As an incorporator, the “trust” does not refer to a trust entity but rather pertains to the subject being managed by a trustee.
- In case of trust or estate as incorporator, is there a need to submit proof of authority?
Yes. Proof of authority to act on behalf of the trust or estate must be submitted at the time of incorporation.
- Who are not allowed to form OPC?
The following are not allowed to incorporate or organize as OPCs:
- Banks, non-bank financial institutions, quasi-banks;
- Pre-need, trust, insurance companies;
- Public and publicly-listed companies;
- Non-chartered government-owned-and-controlled corporations (GOCCs); and
- A natural person who is licensed to exercise a profession, except as otherwise provided under special laws.
- May a foreign national form an OPC?
Yes. A foreign natural person may establish an OPC, subject to the applicable capital requirement and constitutional and statutory restrictions on foreign equity in certain investment areas or activities.
- What is the term of existence of the OPC?
The term of existence of the OPC shall be perpetual. However, in case of the trust or estate, its term of existence shall be co-terminous with the existence of the trust or estate.
- What should the corporate name of an OPC include?
Yes. The suffix “OPC” should be indicated by the one-person corporation either below or at the end of its corporate name.
- Is the OPC required to have a minimum authorized capital stock?
No. The OPC is not required to have a minimum authorized capital stock, except as otherwise provided by special law. Further, unless otherwise required by applicable laws or regulations, no portion of the authorized capital is required to be paid-up at the time of incorporation.
- Who serves as the director and officers of the OPC?
The single stockholder shall be the sole director and president of the OPC. He can be the Corporate Treasurer but not as the Corporate Secretary.
- Who replaces the single stockholder in case of his death and/or incapacity?
In the event of his death or incapacity, the single stockholder may be replaced by the designated nominee or by an alternate nominee. The single stockholder is required to designate a nominee and an alternate nominee named in the Articles of Incorporation who shall replace the single stockholder in the event of the latter’s death and/or incapacity. The written consent of both the nominee and alternate nominee shall be attached to the application for incorporation.
- Is the OPC required to submit and file the By-Laws together with the Articles of Incorporation?
No. Only the Articles of Incorporation (AOI) is needed, which includes the following information:
- Primary purpose;
- Principal office address;
- Term of existence;
- Names and details of the single stockholder;
- Nominee and alternate nominee;
- The authorized, subscribed and paid-up capital; and
- Such other matters consistent with law and which may be deemed necessary and convenient.
- What is the procedure concerning the appointment of officers of the OPC?
- Within fifteen (15) days from the issuance of its Certificate of Incorporation, the OPC shall appoint a Treasurer, Corporate Secretary, and other officers;
- Within five (5) days from appointment, the OPC shall notify the Securities and Exchange Commission (SEC) using the Appointment Form as may be prescribed by the SEC.
- If the single stockholder assumes the position of the Treasurer, is he required to post a surety bond?
Yes. The single stockholder who assumes the position of the Treasurer shall post a surety bond to be computed based on the authorized capital stock (ACS) of the OPC. If another person other than the single stockholder is appointed as treasurer, there is no bond requirement.
Disclaimer: The information in this article is for general information only and is not intended nor should be construed as a substitute for legal advice on any specific matter. A professional legal advice is still advisable and necessary.